In the wheat pits, Chicago settled up 4.75c to close at 483.75s, Kansas was 5c higher to settle at 403.5c, while Minni rallied 5.25c to go out at 507.25c. Corn gained 6.5c to go out at 367.25c, while soybeans were up 24.5c to settle at 895.5c, and WCE canola rallied C$64.1/t to close at $447.10, and MATIF canola finishing lower by 0 Eur/mt. In outside markets, the Dow Jones gained to close at 26688.84 points, crude oil was down, and the Aussie dollar settled 0.000312 higher at 0.68647, the CAD rallied $0.0016, and the EUR gained 0.0053.

There are many sayings in trading specific to any number of market moves. There is one about those who try to pick the market’s bottom, which essentially means that it invariably ends in tears. Post last night’s USDA World Agricultural Supply and Demand Estimates (WASDE), it is still unclear if that will be the case for the wheat market. The day started with some positive signs on trade negotiation, with Donald Trump announcing a delay of the latest tariff increase as positive news. This tweet was somewhat validated by reports of a 600,000t soybean sale to China, with an additional 5 million tonnes (Mt) to be booked as part of the final deal, in a piece of anecdotal but positive news. WASDE was, to some extent, exactly what was expected. Wheat was a snooze fest, with US carry-out unchanged from August’s figure. Globally, USDA cut Black Sea production by 1.5Mt, and the Australian crop by 2Mt to 19Mt. This was offset by EU and India going up 1Mt each. Interestingly, Canada and Argentina were unchanged. Post some demand cuts, global ending stocks ended up at 286.51Mt, 1Mt higher than the August figure.

September’s WASDE was always going to be about corn. The market was looking for a yield of 167.2 bushels per acre, but was given a 168.2bu/ac, above the trade’s guess, but below last month’s 169.5bu/ac. USDA then trimmed demand, which ultimately led to a slightly heavier balance sheet. However, it was beans that housed the surprise. Carry-out was taken from 755 million bushels (Mbu) in August to 640Mbu, below the trade’s guess of 660Mbu. A cut on production came via yield and, counter to ideas of lower exports, the USDA increased demand.

What does this mean for Australian grain? There is no doubt that a short-covering rally would add some strength to global numbers. Cuts in the Black Sea and Australian production forecasts add to ideas that the wheat market is trying to find a bottom.

Many think both the Australian and the Argentine crop have more downside, and the Canadian harvest just can’t get going.

While Australia remains above export parity, this is largely a sentiment driver rather than a balance-sheet shift, but with all the risk in front of the Australian crop, it seems unlikely that the market sets back meaningfully until the headers roll. Locally, the forecast for Victoria remains positive, with the Bureau of Meteorology still showing upwards of 10 millimetres of rain for the Wimmera, and parts of the Mallee also forecast to get a drink. Conditions have been favourable in the past week through South Australia and Victoria, which has helped crops. New South Wales and Queensland remain dry.  Harvest in Central Queensland is well under way with a few surprises from better-than-expected yields. The ASX January contract, where most of the liquidity has been trading, continued to ratchet higher yesterday, and other markets followed suit to finish firmer for the day.