Markets

Daily Market Wire 24 January 2025

Lachstock Consulting January 24, 2025

The day ahead

Weather – Warmer than average temperatures in Russia currently and rainfall running around 120mm behind normal but as always production is all about what happens in spring. There is talk of winterkill/freeze in the US, but it remains to be seen whether or not it is too early to have a significant impact.

Markets – Veg oil made back some of Wednesday’s losses overnight following corn to close higher with analysts believing fund traders are adding long positions in corn. Wheat was mixed with Matif and SRW closing slightly higher.

Australian day ahead – Canola bids should see a small lift on the back of overnight rises in Matif and Winnipeg and a rebound in bean oil. Expect cereal bids to be slightly higher on the back of corn.

Both charts of forward curves are expressed in Australian dollars per tonne; on the left is canola (red) and rapeseed (blue); on the right, from top to bottom, is MATIF, Minneapolis HRS, Chicago SRW and Kansas HRW. Source: Bloomberg via Lachstock Consulting. Click expand

Offshore

The Argentine government has announced overnight it would temporarily lower grain export taxes starting Monday until June. Tax on soybeans moved from 33 percent to 26pc and on wheat/corn from 12pc to 9.5pc.  

So far Canada has avoided Trump tariffs with optimism that a 25pc tariff may be avoided. Week 23 (ending 12th Jan) canola exports were at 203kt well ahead of the pace needed to hit the 7.25Mt target, having exported 4.926Mt as of January 12.  

Japan’s MAFF purchased 126,893t milling wheat in its regular tender from the US, Canada & Australia. Australia accounted for 35,210t ASW to be loaded 1-30 April.  

South Korean importer (NOFI) purchased 65kt feed wheat this week, and Thailand passed on its tender for 195kt wheat yesterday.  

Russian fob wheat prices have been stable over the past week despite the Russian government export restrictions, with 12.5pc pro wheat for February quoted at US235/236 fob. 

Cattle futures made all-time highs overnight for a second day with the border ban on Mexican feeder cattle continuing indefinitely.  

Demand for US grain transportation—via barges, trucks, and railcars—was strong in Q4 2024, driven by higher demand for corn, soybeans, and wheat, according to the USDA. While inclement weather this month is disrupting logistics, last month systems met demand. The USDA noted rail and barge volumes exceeded the prior three-year average, with grain vessel loadings also rising in the US Gulf. 

Australia

Chance of exceeding median rainfall. Source: Australian Bureau of Meteorology via Lachstock

Western Australian canola bids were slightly higher yesterday, at around $850 FIS. WA wheat bids were lower around $369 with barley still well bid around $340.  

 In the east canola bids were off between $6-$20 to around $788. Wheat was unchanged at $345, and barley was firmer with track bids between $300-$323.   

Livestock feeding is beginning in earnest through SA and Western Vic with feed barley trading around $330 delivered through these regions with most hay sheds empty, expect less barley to make it port through these areas to keep stock fed.  

The 3-month long-range BOM forecast from Feb-Apr is indicating above median rainfall for most Qld, NSW, Vic and SA. Welcome news for growers if it means a ‘normal’ break, particularly for Vic and SA.

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