Canola futures book expanded limit-up gains closing around 5pc firmer. Wheat futures reacted to WASDE with 4pc to 5pc gains, corn and soybeans by smaller amounts.

International

The USDA published July WASDE reports last night, with grain markets all rallying up both into and after the reports – Chicago wheat closed +25 3/4¢, KC +21 1/4¢, Minny +43¢, and Matif +1.75€ on the earlier close. Corn was up 15 3/4¢ and beans +19 1/4¢ (Matif +14.5€, Winnipeg +$45).  Macro markets had the DOW up 126 points, though crude was back down half a buck to $74.1 WTI / $75.2 Brent.  The AUD is trading around 74.8¢, the CAD$1.245, and the EUR $1.186.

USDA left corn and bean yields both unchanged at 179.5 bu/acre / 50.8 bu/acre, respectively.  With the higher corn acres that saw carry out stocks there up 74 mbu despite higher exports and domestic use.

They also released this year’s first formal “by class” wheat balance sheets, pegging HRS production at 305mbu (345 mbu all spring), down from 530mbu last year and the lowest production in over a decade.  This pulled down overall wheat carryout to 665mbu, the lowest in years despite a higher winter wheat crop.

Plenty of arguments are to be had about various global balance sheet figures. Attracting most focus was whether the cut in Brazil’s corn crop was sufficient. At the same time though, the bigger focus is still on row crop yields.  July WASDE is largely model driven, but heading into August and Sept the figures should start to see more changes, in line with critical weather windows.

Corn Belt weather maps still predict a solid inch across southern Minnesota through the eastern Corn Belt and latest runs have added a bit more rain forecast for eastern Kansas, all beneficial to corn if the falls eventuate.

The spring wheat market is continuing to trade it’s own production concerns, although nice to see a USDA figure come in this close to private estimates.  The problem is real, it’s simply a question of how big the final impact will be when harvest gets moving, plus an ongoing debate about how much will be dropped for hay versus harvested for grain.  No easy solution for spring wheat markets yet though, unless the Canadian crops somehow hold in there, substantially better than they have been.

Post last night’s market close the weekly crop conditions report was released. Corn was rated 65pc good-to-excellent (+1pc), beans 59pc (-1%), and spring wheat at 16pc (unchanged week on week on a national level).  Milo/sorghum was rated 70pc G/E, down from 72% week prior. Winter wheat harvest progress was pegged at 59pc complete, still slightly “behind” normal.

The regular weekly export inspections report had corn at 0.99Mt, beans 0.2Mt and wheat at 0.4Mt, all about as expected/needed, although there’s still a large volume of old crop Chinese business to execute.

Saudi Arabia’s SAGO wheat tender eight wheat boats booked at around a $285/t candf Red Sea ports / $295/t Gulf ports for October delivery.

Turkish barley tender reportedly traded about 440,000t around $236/t candf. These are quoted in 25,000t lots.

Australia

Local markets started the week with limited liquidity and slightly weaker cereal bids (off a buck or two on wheat) though canola did firm again following the global boards.

Markets early this morning are sorting through the results of last night’s USDA reports and taking new views on where corn will track from here with global markets still well focused on row crops.

BOM maps have filled in some more moisture for the short term, with another inch for eastern cropping areas in NSW into later this weekend.

Source: Lachstock Consulting