Lower for grains and oilseeds.

• CBOT wheat down -5c to 525.25c,,
• Kansas wheat down -3c to 534c,
• Corn down -3.75c to 360c,
• Soybean down -7c to 837.25c,
• Winnipeg canola down -2.09$C to 488.8$C, and
• Matif canola down -2€ to 368€.
• The Dow Jones down -92.54 to 26062.12,
• Crude Oil down -0.06c to $US68.84 per barrel,
• AUD up to 0.717c,
• CAD up to 1.303c, (AUDCAD 0.935) and the
• EUR down to 1.168c (AUDEUR 0.614).

Wheat

Wheat was caught up in corn/bean pressure and couldn’t sustain its own gains, closing 11 cents off the highs. There were a lot of reasons to buy wheat yesterday, Russian phyto controls slowing exports, Saudi pricing some US wheat as well as frosts in WA that threaten approximately 1 million tonnes (Mt) of production. Implied volatility in Dec Soft Red Winter wheat futures finished at 23.75pc. Matif wheat was up €25cents/t to €198/t. Russia has exported 12.4Mt for the first quarter of the marketing year, this is an impressive pace and raises concerns for government controls if sustained. The government has previously suggested wheat exports over 25Mt could require some sort of intervention. US weekly export sales came in at 406,400t which is at expectations, but needs to be much higher to prove the global balance sheets dependence on US wheat. Hard to do this, when US prices keep running away from export business. Egypt’s GASC announced a tender after the close for twice its usual tender volume, which adds to an ever-increasing Middle East demand profile, as purchasers recognise the limited amount of risk premium currently priced into this wheat market.

Corn

Corn sold off.  The corn market created new lows, feeling pressure from beans, reports of surprisingly large yields in the Midwest and reports of ethanol plants going out of business. Crop progress after the close revealed corn harvest at 9pc, with conditions unchanged at 68pc good-to-excellent. The technical picture is looking grim and funds could increase their short position ahead of perceived harvest pressure and a slow-to-fire demand profile. Export sales at 1.03Mt were at expectations and tracking ahead of last year, but the order flow associated with a record harvest is not something that potential bulls would choose to stand in front of..

Soybeans

Soybeans continued their downward spiral with no one willing to bid a market with large supplies and ever evolving political risks. Trump announced new tariffs on US$200billion worth of goods that could be implemented later this week. Chinese purchasers are refusing to buy US beans despite them now being cheaper than Brazilian beans once tariffs are factored in, the uncertainty regarding further political risks is too large. Soymeal was down $3/t and soy oil was down 6 points. Export sales came in below expectations at 788.5Mt. Crop conditions had harvest at 6pc completed with conditions down 1pc at 67pc good to excellent.

Canola

Canola was lower in both contracts, led down by a flailing oilseed complex. Production concerns in both regions are ongoing, but difficult to encourage buyers ahead of a monster US bean crop and declining biofuel margins.

Australia

Australian values were higher across the board yesterday as frosts in WA and an ongoing dry forecast prompted yield declines and consumer panic. The USDA’s numbers for Australian are unrealistic and will have to be corrected eventually in their WASDE report, the world is presuming 14Mt of exports which is not plausible and the longer it stays hot and dry on the east coast, the greater our dependence on interstate transfers. Grower washouts are ongoing on the east coast and sellers are scarce. We expect to see support to Aussie cash markets while the crop continues to go backwards.