The day ahead
Weather – A solid week for US wheat. Rounding off last week with 2-3 inches through the Panhandle into Kansas. Things take a break this week with nothing really on the forecast. Below average rainfall for the Black Sea region and above average temps. Extremely hot in China, but should get some rain as well. No big risks today.
Markets – Range bound in cereals, on fire in vegoil. Another day, another leg higher in canola. USDA took the knife to US row crop yields which added support to the complex. AUD struggling for direction but feels like it’s at the mercy of USD rather than trading independently.
Australian day ahead – Harvest really getting going now – interestingly wheat quality seems to be sliding a little on the east coast with ASW the predominant grade. AUD certainly won’t hurt so wheat should catch a bid. Canola will be higher, just a matter of how much.
Offshore
USDA report always throws up something. November gave us row crop cuts. Market was looking for 183.7bu/ac in corn and got 183.1bu/ac. Pre report beans guess was 52.8bu/ac but the USDA reckons its 51.7bu/ac – this drove soybean carryout from 550mbu to 470mbu. Wheat was a non-event.
Canada canola exports for the week were 204,100t, putting year to date exports at 3.1Mt vs 1.6Mt for the same period last year.
Planting in France is rapidly advancing. It was delayed by untimely wet conditions. Click on image to expand.
Russia and Malaysia have signed a memorandum for the supply of wheat. According to the Russian Union of Grain Exporters and Producers, Russia is capable of supplying 600-700kt wheat every year. Australia has averaged a little under 900kt wheat exports to Malaysia over the last decade, accounting for 47pc of Malaysia’s total imports.
AUD fell on Friday amid comments by newly elected Donald that the US will become the “crypto capital of the planet”. He was busy posting clips of his plans after his inauguration – including tariff increases focused on China. At the same time, the market was a little dissatisfied that the latest round of China stimulus not really targeting commodities. Crude and iron ore subsequently fell.
Australia
In Western Australia, canola bids ended the week higher at A$875, up $45 from the beginning of the week, with GM bids at $771. Wheat bids remained unchanged at $370, and barley bids were steady at $320.
On the east coast of Australia, canola bids finished the week around $812, an increase of $15 for the week. Wheat bids were unchanged at approximately $344, while barley bids were slightly firmer, around $299.
Rainfall over the next week is expected to be significant for most of the east coast, with forecasts ranging from 15-100mm for regions across Qld, NSW, and Vic, with the heaviest falls expected closer to the coast.
Good wheat yields are being reported from central NSW, averaging around 4t/ha. However, quality is lower than usual with predominately ASW in areas that would typically produce H2/APW.
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