US wheat closed lower while corn and soybeans posted gains.
- Chicago wheat July contract down US7 cents per bushel to 499.25c;
- Kansas wheat July contract down 10.5c to 447c;
- Minneapolis wheat July contract down 6.25 cents to 513.25c;
- Corn July up 3.5c to 329.75c;
- Soybeans July contract up 0.5c to 866c;
- Winnipeg canola July contract steady at C$467.80 per tonne;
- MATIF wheat September contract down €2.50/t to €182.50;
- MATIF rapeseed August contract down €2.75/t to €375.50;
- Brent crude August contract down US$3.18 per barrel to $38.55;
- Dow Jones index down 1862 points 25,128;
- AUD lower at US$0.6851;
- CAD higher at $1.3629;
- EUR higher at $1.1301.
The USDA released its monthly World Agricultural Supply and Demand Estimates (WASDE) report overnight, with increased production seen for wheat, which pushed all three US contracts lower. WASDE figures were supportive for soybeans, with US carryout being below market expectations, and China soybean imports lifted by 2 million tonnes (Mt) to 94Mt, while Brazilian production was left unchanged at 124Mt. Corn also had a slightly tighter carry-out than the market was looking for. The row-crop report was a precursor to the more significant 30 June stocks and acreage report. It should be remembered that the world was in the grips of an unprecedented reaction to a yet to be defined pandemic when the planters were rolling in the US. What impact this will have on planted area will be revealed at the end of the month.
Outside markets capitulated as the US in particular realised that COVID was still a thing. Additionally, energy markets had to deal with an unexpected growth in inventory. Currency repriced as the US dollar finally found some support, which forced the AUD back to a 68 handle.
Australia’s new-crop market showed signs of firmer bids and offers yesterday, with grower bids through Port Kembla zone stronger by AUD $1-2/t on wheat. Current-crop is still very much hand to mouth on the buy side, with July plus wheat markets sliding lower. New-crop canola has also firmed over the past couple of days along the east coast, with track values edging back up into the mid to high $590s range. Again, all green flags for Aussie weather conditions, with Western Australia and Queensland to benefit with rain on the forecast.
Source: Lachstock Consulting
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