Markets mixed ahead of WASDE. US dollar stronger.

• Chicago wheat July contract down US4.75¢/bu to 517.25¢;
• Kansas wheat July contract down 5c to 475¢;
• Minneapolis wheat July contract up 2.75c to 518.75¢;
• MATIF wheat September contract down €0.25 to €188/t;
• Corn July contract down 0.75c/bu to 318.5¢;
• Soybeans July contract up 4.5¢/bu to 855¢;
• Winnipeg canola July contract up $C2.70 to $471.30/t;
• MATIF rapeseed August contract down €2.25 to €370.50/t;
• Brent crude July contract down US$1.34 per barrel to $29.63
• Dow Jones index down 109 points to 24222;
• AUD weaker at $0.6484;
• CAD weaker at $1.4021;
• EUR weaker at $1.0810.

Markets

In the wheat pits Chicago settled down -4.75 usc/bu closing at 517.25usc/bu, Kansas was -5 usc/bu lower to settle at 475usc/bu, while Minni rallied 2.75 usc/bu to go out at 518.75usc/bu. Corn fell -0.75 usc/bu to go out at 318.5usc/bu while Beans were up 4.5 usc/bu to settle at 855usc/bu WCE Canola rallied 1.8 CAD/mt closing at 464.2CAD/mt with Matif Canola finishing lower by -2.25 Eur/mt. The Dow Jones index fell -109.33 points. Us currency strengthened against the Australian and Canadian dollars and the Euro.

Report day. The USDA May report is one of the major market movers given it’s USDA’s first crack at new crop balances, which is a tricky exercise in this environment. In the last session before the numbers the market squared up and hunkered down. It was a holiday in Russia so there were no Russian cash values.

After the close the US crop condition and progress reports were released. Winter wheat condition was pegged lower by 2pc, spring wheat planting is close to the slowest pace in the last 6 years while soybean planting was close to the fastest pace over the same period. Note that planting pace figures are collated via survey and the percentage planted figure is reported off a variable base, i.e. the acres to be planted figure can change so the percentage needs to be taken with a grain of salt. However, with safety nets such as the US loan program and insurance levels well above current prices (especially in beans) the US grower is still incentivised to plant the crop despite what is going on in the world.

News emerged overnight that China has banned 4 major Australian abattoirs from selling red meat into China – this comes on the back of the barley anti-dumping preliminary finding which will only add to the weakness in the domestic feed grain markets.

Australia

In Australia it was all barley talk yesterday.  The market filtered through the latest findings and the first reaction of the trade wondering where to peg this market was to pull the bids back. WA new crop barley was bid $55-60/t lower, making Kwinana 20/21 season feed barley around a $205/t FIS. Current crop bids were pulled altogether. New crop wheat softened across the board and liquidity was low, and the same occurred in other commodities. It would seem likely that growers will make a late switch out of barley where they can. Overall it is unlikely to affect area much, more so in WA, SA and NSW where there is still time to make a late change. Conditions remain fine for the balance of the week through the cropping belts, with a few more showers forecast for western Victoria.  Queensland growers would be wanting to see some more rain within the next 12-14 days to top up.

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