International

GASC and Jordan went wheat shopping overnight which helped calm offshore wheat markets. The previous round of Egypt buying was late June when Russian wheat traded US$227/t and the business was shared between Russian, Bulgarian and Romanian origin. This round, GASC bought 770k with a breakdown of 720k Russian and 50k Bulgarian all for September shipment. The cheapest Russian offer was revealed at $226/t fob, but interestingly that was for 60k with the balance of the remaining offers were in the $228 – $235/t range. Jordan tendered to buy 120k and purchased at least 60k of hard milling wheat. 

Storms in the US continued to roll through the Northwest Corn Belt. Overnight it was Illinois and eastern Iowa that experienced very high winds and hail and it remains to be seen what crop damage was done. 

Algeria is also in for 50k milling wheat for September shipment, and importers from Thailand have issued a tender for 175k of feed wheat for Sep thru Dec shipment. 

Black Sea market analyst SovEcon yesterday estimated July Russian grain exports at 3.4Mt (4.7Mt in June), with wheat at 2.8Mt compared to 4Mt in June. 

China continued to be an active buyer of soybeans amid reports of 25-30 cargoes trading last week and Brazil continuing to be the main supplier at the expense of US new crop soybeans. The large Brazilian crop (153Mt USDA) continues to price competitively in the export market and some report suggest that approximately one quarter of the crop remains unsold and in the farmers hands. 

Gold prices jumped close to 2pc to a record high overnight as investors flocked to the safe-haven asset. Comments from US Federal Reserve chair Jerome Powell that inflation was back heading towards the 2pc goal of the central bank reassured markets that a rate cut is on the cards in September. 

Oil prices settled 1pc lower and it was the third straight day of losses. Monday’s weaker economic data out of China brings further concerns of its slower economy with many refineries cutting back on weaker fuel demand.

Australia

More of the same for the markets in the west yesterday with new crop canola sliding down a further A$10/t to be around $770/t in most port zones. Losses were similar for new season wheat and barley which were being bid $358/t and $316/t fis respectively. 

The east was a similar story where new season canola moved down further. It was bid $702/t MPT and current crop bids moved lower similarly. GM canola is not experiencing the same losses as non-GM, holding firm at around $646/t for new season. New season wheat followed canola’s lead to lose a further $10/t yesterday to be bid around $352/t. The losses for barley were smaller, with the bid at $308/t. 

Agricultural commodities are not the only ones feeling the losses over the last week. A stronger USD created headwinds for commodities broadly and, coupled with demand concerns over China, continued to dampen market sentiment. 

Yesterday saw some good rain fall in parts of Victoria and New South Wales, up to 25mm fell throughout parts of the Western Districts. Further east in the Gippsland and Goulburn Valley regions up to 100mm were seen in isolated areas. Southeast NSW also saw up to 25mm fall in parts.