Weather: All about winter kill. We are in the heart of the weather market and the risk of damage to the US crop clearly needed some more risk premium. Additionally, a chunk of the Russian crop is also facing some extreme cold – Rostov saw temps at -12 degrees c vs the 30 yr average of -1.8 degrees c.

Wheat prices $A per tonne. First chart. Forward curves. Second chart. Futures price Chicago (blue line) and Matif (orange line) and on the far right axis the differential between the two as identified by the grey area under the graph. Source: Bloomberg via Lachstock. Click expand

Markets: Boom – Wheat was actually pretty benign for most of Friday night’s session, but found a bid into the close. Definitely driven by weather. The Spec was short 107k contracts at the end of Jan – feels like the last of the shorts would have trimmed their position at worst. We won’t get a read on what they did on Friday until next Friday.

Australian Day ahead: Things are lining up a little here. The gorilla in the export market is facing some extremely adverse conditions and, now, we have US futures pushing the sentiment. Once again, the AUD found a way to take the sting out of the futures move, rallying to 0.6350. Still, in A$/t terms – Friday’s move was worth just over A$8/t so expect to see at least half of that added to bids.

Offshore

Conditions are wetter and colder than the norm in Colby, Kansas this season. Source: Bloomberg via Lachstock Click expand

Freezing temperatures in key growing regions—Kansas, Colorado, and Nebraska—raise concerns about winterkill, especially in areas with minimal snow cover. The Commodity Weather Group forecasts patchy damage in some fields; however, uncertainty persists regarding the overall impact. More icy temperatures are anticipated next week, which could heighten damage concerns and maintain bullish price momentum.
The National Oceanic and Atmospheric Administration (NOAA) reported that January 2025 saw the second-lowest extent of Eurasian snow cover on record, highlighting a significant reduction in snow coverage across the region.
Soybean producer organisation Aprosoja Brasil urged farmers to reject the EU anti-deforestation clauses in contracts. Upcoming EU regulations are set to ban imports linked to post-December -2020 deforestation, a measure that Brazilian farmers perceive as an infringement on national sovereignty.
New guidelines in China will promote agricultural biotechnology from 2024 to 2028 and focus on key crop varietal development, including soybeans. The initiative aims to enhance food security and reduce import reliance.
The Trump Administration is considering a policy to prohibit recipients of the Supplemental Nutrition Assistance Program (SNAP) from purchasing sugary drinks and junk food. Agriculture Secretary Rollins, along with Health and Human Services Secretary Robert F. Kennedy Jr. and Elon Musk’s Department of Government Efficiency (DOGE), plans to prioritise healthy food items for SNAP benefits. Rollins emphasised that the goal is to ensure taxpayer money is spent on nutritious food, not to deprive children of sustenance. In fiscal year 2023, 42.1 million people received SNAP benefits, costing US$112.8 billion annually. A bipartisan bill is being considered to restrict SNAP purchases of unhealthy foods and to study the impact on nutrition security and diet quality.

Australia

Wheat price delivered Griffith Hanwood. $A per tonne. Source: Lachstock Click expand

WA canola bids ended the week around $850, wheat was bid $377 and barley $345. New crop bids were $805 for canola, $390 for wheat and barley $308.
In the east of the country canola was bid around $765, wheat was $350 with barley $318. New crop canola was bid $742 with wheat $358.
Domestic feed grain markets have been moving higher throughout the country over the last month. With delivered Darling Downs wheat now bid $340 and barley $322. At Griffith, NSW, wheat is bid $328.
Sorghum delivered markets have been strong despite harvest pressure and big crops. Delivered Brisbane/Newcastle sorghum on Friday was bid $352 and Downs $322.