International

It is pre-WASDE-report day and the markets’ best guesses leading into the report are as follows;  

• US corn 24-25 ending stocks at 2.289bbu vs June at 2.102  
• US soybeans 24-25 ending stocks at 447mbu vs June at 455mbu  
• US wheat 24-25 ending stocks at 785mbu vs June at 758mbu  
• Global corn 24-25 ending stocks at 311.5Mt vs June at 310.80Mt  
• Global soybeans 24-25 ending stocks at 126.8Mt vs June at 127.9Mt 
• Global wheat 24-25 ending stocks at 252.1Mt vs June at 252.3Mt  

News overnight reported that Ukraine seized a vessel carrying grain from the Russian-occupied territory of Crimea. Ukraine claimed the vessel was carrying “looted agricultural products”. Given the short structure of the futures markets, it seemed to make sense that this news prompted some short covering. 

Some rain fell in the winter wheat areas of Russia over the last few days, but the heat has also arrived. While this probably will not harm the balance of winter wheat it will undoubtedly be impacting the spring crop, corn and sunflowers. If the French harvest is anything to go by, the Russian winter crop could easily be 2 weeks ahead of normal which would put the middle of harvest, just a few weeks away, at the end of July, early August. 

FranceAgriMer has indicated that soft wheat exports are expected to be 14.1Mt for the 24-25 season. In the first outlook for the 24/25 crop year, it estimated that 7.5Mt would export to non-EU countries, 26pc lower year on year. Barley exports are pegged at 5.8Mt vs 6.8Mt last year. Spring this year in France was the fourth wettest on record which is having an impact on both yield and quality. 

Macro factors are having significant influence this week, and in forex news overnight the Australian dollar touched 0.6800 after signs US inflation had finally succumbed to US fiscal management. June inflation was down -0.1pc vs the previous month and was pegged at 3.0pc annually vs the pre-release guess of 3.1pc and 3.3pc last release. US jobless claims were 222k vs last month of 238k. 

The Rosario Board of Trade estimated the Argentinian wheat crop at 20.4Mt, down 2.4pc from the last estimate on lower acres. 

Crude oil rose for a third straight day as the likelihood of a rate cut in the US spurred buying.

Australia

In WA, the surprise of the month was some current crop wheat pricing into The Philippines as feed wheat for Sep shipment. Over the past 3-plus months The Philippines demand has been serviced by Vic and to a lesser degree NSW. We do not anticipate this to continue on the current crop wheat, it just tightens WA current crop balance sheet even more. 

New crop canola (CAN) bids were A$5-10/t lower to $790/t FIS yesterday. New season wheat bids remain around $370/t and feed barley $330/t, both FIS. 

In the east, the market continued its slump lower, canola’s drop looks to be slowing, after around a $50/t drop since last week’s high. 

The AUD overnight reached its highest point since January. 

Some decent rain was recorded throughout the Vic Mallee and Wimmera yesterday with falls ranging from 7-20mm. Once again however, the Western Districts missed out. The back end of the forecast may rectify this with 50-75mm forecast for the southern part of the growing belt.