It feels like the markets are boxing up into a corner at the moment looking for the next strike out. Aussie weather continues to deteriorate and with hot temps across NSW this weekend, in many cases 10C above average, we will see damage continue and more crop estimates nudge down to 20mmt or lower. The silver lining is that there is potentially some welcome relief in the forecast for SNSW (10-20mm) into next week, but that is more a stabiliser than anything else at this point. Other regions will continue to go backwards across the state. WA looks to be in line for some great rain, that should offset frost in the Albany zone last week, fill heads and potentially allow us to turn the worm on the production number there. Seems to be one of those springs where it will be on a knife edge week by week. Basis here is certainly pricing that in with huge numbers being paid and more than pricing in the damage that has been done. Need some farmer selling to realign things, because there is zero export interest at this point and unlikely to be so for a little while yet.

Global wheat market seems to be coming to terms with Russia and the limitations on export capacity there, whilst some chat about looking forward to US planting economics is building market attention. We don’t believe the fund market is short enough at the moment to insight a big short covering rally, especially given we know we have a lot of stock around, but the Aussie story is getting a bit more serious than potentially the wall street community is giving credit. So we watch carefully with our shorts today.

Corn was very flat overnight, with limited new news. The second week system for the Aussie sorghum belt has typically vanished, this remains a very binary factor in the local Aussie market in the coming month. For both sorghum and old crop winter prices.

Oilseeds not showing a lot of gumption either today. Canola still struggling to realise its tight SND as forecasters continue to ere on the side of a larger Canadian crop as the harvest pace continues at record rates and farmer selling continues to keep a lid on the job. Again, with some frost in Australia and margins improving, encouraging China bids, we wonder if this is the straw that breaks the back. Soon enough our attention will turn to planting progress in South America.