Wheat values tumbled in overnight trading.
- Chicago wheat July contract down US8.75 cents per bushel to 496c;
- Kansas wheat July contract down 7.5c to 438.25c;
- Minneapolis wheat July contract steady at 515c;
- Corn July contract down 0.25c to 329c;
- Soybeans July contract down 2c to 867c;
- Winnipeg canola July contract up C$2.10 per tonne to $473.30;
- MATIF wheat September contract down €1.25/t to €179.75;
- MATIF rapeseed August contract up €0.25/t to €376.50;
- Brent crude August contract up US$1.24 per barrel to $40.96;
- Dow Jones index up 527 points to 26,290;
- AUD lower at US$0.6884;
- CAD higher at $1.3541;
- EUR lower at $1.1261.
Wheat fell overnight after spending the majority of the night session in the green. A mix of harvest pressure and the confirmation that Russia will lift the export ban for new crop drove the selling, pushing Chicago to fresh lows. The US wheat harvest is pushing into Kansas and quality reports suggest overall quality to be questionable at best. The reality is the futures market contracts in Chicago and Kansas can take downgraded quality at a discount which may be too onerous compared with the cash markets, but they can still receive deliveries of lower-quality wheat. The result can be a lower quality year that becomes bearish futures while the cash market fights it out for the better quality. Given the size of the break in the US, this wheat is now pricing itself into some export paths, which is desperately needed to help deal with a big carry-out.
Aussie cash markets fell AU$2-3/t yesterday on new-crop wheat across the zones. Barley seems to have found some common ground, with new-crop prices stabilising over the past week. Geelong/Melbourne track prices have held at around $240-$245/t, and Port Kembla has seen similar values. The export pace in SA and WA remains strong on old-crop barley. Current bulk-handler stock reports suggest stocks will continue to tighten as we roll into September-October. As we move into the new season, Victoria’s balance sheet is set to return to surplus. New-crop canola prices felt the heat yesterday, with delivered bids coming off as much as $10/t along the east coast, due mainly due to currency, offshore markets, and recent rain boosting crop confidence.
Source: Lachstock Consulting
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