Grain and oilseed markets tumbled in overnight trading.
- Chicago wheat July contract down US28.25c/bu to 701.5c;
- Kansas wheat July contract down 33c/bu to 657.75c;
- Minneapolis wheat July contract down 24.25c/bu to 741.25c;
- MATIF wheat September contract down €10.25/t to €215.25/t;
- Corn July contract down 40c/bu to 674.75c;
- Soybeans July contract down 58.4c/bu to 1584c;
- Winnipeg canola July contract down C$45/t to $857.30;
- MATIF rapeseed August contract down €23/t to €532.25/t;
- US dollar index up 0.04 to 90.79;
- AUD weaker at US$0.772;
- CAD weaker at $1.217;
- EUR weaker at $1.207;
- ASX wheat July contract down AU$2.50/t to $316.50/t;
- ASX wheat January 2022 down $0.50/t to $320.50/t.
It is difficult to know if the broad-brush clean-out was due to the increased talk around US and global inflation or simply that, with USDA’s WASDE report out of the way, the market was taking some risk off the table. Rainfall deficits in the northern plains and into Canada are easy to forget.
Debate surrounds the benefit of any rainfall for the remainder of the Brazilian second corn crop. Between 25-33 millimetres of rain is forecast for the next 15 days, and some longer-range forecasters are suggesting more rain is in the back end.
European and Black Sea wheat areas have seen beneficial rainfall. The debate over the cold temperatures and subsequent slow development of the crop has led to vastly divergent crop estimates, even within the US Government. The US attache has pegged the crop at 77.5 million tonnes (Mt) while USDA printed 85Mt.
Movements in US futures have not dented the appetite of the Chinese, who added another 2Mt of new-crop corn purchases last week. It will be interesting to see if the the break in futures since the report encourages more buying
New-crop wheat markets lost ground yesterday. Values along the east coast fell AU$2-$3/t, but new-crop canola was up $10-$15/t, and barley was relatively unchanged over the course of the day. Current-crop barley continues to catch a bid around the country. Spot loads for next week continue to trade for ASW1 and APW1 wheat delivered Geelong and Melbourne at around $335-$340/t. With the boards off overnight across the commodities, expect to see some more downside in the local market. To keep both the domestic and export programs running for the last half or May and beginning of June, markets are expected to remain bid side.
Hopes of rainfall remain subdued for the next eight to 10 days across Australia. Light rain has been forecast for Western Australia, South Australia, and parts of Victoria. In SA and Victoria’s Wimmera and Mallee, this takes us to the end of May, which further pushes out the winter-cropping program waiting for that next rainfall event to avoid false germination. Reports are that Mallee growers are up to 75-per-cent through their planting program, with dry sowing happening, and hopes abounding for a better outlook for June.
Source: Lachstock Consulting