Grain markets continued upwards across the board last night. The weekend will bring the US/China trade deal talks and it’s time to see how macro markets take those discussions.

Rally in US

Markets have been scrambling to find a justification for today’s rally. Some hanging their hats on the export program while others explaining it away as the potential for lower acres as indicated by the release of USDA Farm Service Agency (FSA) data.  We do note that the FSA data this year are not directly comparable to other years as, with coronavirus and the associated shutdowns, the government gave farmers a month delay to finalise reporting. We will likely see some normalisation as they finish up the data.

Plenty export business written

Soybean export sales figures were better than expected for both old crop and new crop at 570,000t and 2.8 million tonnes (Mt) respectively compared with new crop expectations of below 2Mt. Corn and wheat sales were more mediocre, with only 500,000t of new crop corn and 368,000t of wheat.  The wheat figure included a spring wheat boat to Italy and a Brazilian boat switched from unknown.  There were flash sales reports for beans and corn to China, and to unknown destination, likely China, totals amounting to just under 400,000t beans and 110,000t corn.  Rumours about more sales today have been circulating, but no confirmation.

Egypt prices up

GASC’s latest wheat tender saw seven boats booked in the end, all Russian, at prices about US$3/t higher than booked at last tender, but in line with other offers in that prior tender.

Crop downside risks

More comments out of Argentina are highlighting the ongoing drought impacts there. The Buenos Aires exchange joined the crowd flagging yield risks there. Continued dry weather maps (out through the two-week outlook) aren’t going to help easy any worries either.  A group of German cooperatives was also out revising down their estimate on the local wheat crop there (-1Mt), noting that there was less acreage than they had previously estimated.  Ideas on the storm impacts in Iowa are also continuing to circulate – as before there’s a wide range, with the high/low difference nearly half a million bushels.

Australia

New season cash markets remained relatively unchanged in yesterday’s trading.  Low liquidity from both the trade and farmers remained the name of the game, and limited volume actually transacted.  We did see more scattered showers through parts of southern WA and then SA/Vic, and forecast maps remain fairly solid into the weekend for NSW.