In the wheat pits Chicago settled down -3.75 usc/bu closing at 474.5usc/bu, Kansas was 3.65 usc/bu higher to settle at 404.25usc/bu, while Minni softened -2.75 usc/bu to go out at 514.75usc/bu. Corn gained 0.75 usc/bu to go out at 371usc/bu while Beans were down -7.25 usc/bu to settle at 870.75usc/bu WCE Canola rallied 1 CAD/mt closing at 451.2CAD/mt with Matif Canola finishing higher by 2 Eur/mt. The Aussie was -0.29742 lower to settle at 0.37715, the CAD softened -0.0007 while the EUR fell -0.0031

The next chapter in the US wheat market apparently hasn’t been written yet. As we enter the doldrums between northern hemisphere and southern hemisphere harvest news gets thin. Domestic spreads such as Kansas v Chicago will get some attention, but capital allocated to that trade has had a rough ride. From a spot continuous perspective (ie the first listed contract) we are in uncharted territory. The low point of the spread, 89c/bu clearly shows the lack of convergence in the physical market – or lack of participants wanting to converge the trade. Fundamentally the spread makes sense – HRW balance sheet is more than comfortable while SRW is tight so the function of the spread is to attract HRW into the SRW delivery system. Additionally, HRW has now been beaten up to the point that it is pricing into any discretionary demand – albeit a little hard to find at the moment.

From a corn perspective, conditions are mixed at best. The ProFarmer row crop tour kicks off next week which has historically pushed the market around as a convoy of punters drive through the belt, relentlessly tweeting about how good or bad things are. There is some science to how they assess yield however and they will release their state by state ideas as they move along.

Back in the Aussie grain markets, we continue to watch a patchy rainfall forecast for SNSW in which will edge crops along but still need a significant rainfall event to secure production. Another rainfall event is forecast for Victoria, with parts of the Western Districts already having received on average upwards to 50-60mm for the month and crop conditions looking fantastic. Market wise canola gaining momentum, stocks potentially tightening which is bringing interior values to $570-$580/t.  Sellers exiting length prior to new crop as inverse builds slightly. As the week draws to an end this market still feels very much a weather play, how much demand can head North to satisfy the feed sector and do the export markets start to find some levels here in Aussie on wheat through SA.