Grains and oilseeds gapped lower again. The biggest downward moves, in canola, were 8pc. Wheat fell 2-4pc. Brent crude eased 2pc and the Dow firmed a fraction.

• Chicago wheat July contract down US39.25 cents per bushel to 937.25c/bu;
• Kansas wheat July contract down 34.25c/bu to 1005c/bu;
• Minneapolis wheat July contract down 25.5c/bu to 1080.5c/bu;
• MATIF wheat September contract down €11.50/t to €359/t;
• Black Sea wheat  July contract down $7.50/t to $393/t;
• Corn July contract down 21.25c/bu to 746.75c/bu;
• Soybeans July contract down 59.5c/bu to 1593.25c/bu;
• Winnipeg canola November 2022 contract down C$67.40/t to $844.70/t;
• MATIF rapeseed November 2022 contract down €33.75/t to €657.50/t;
• ASX July 2022 wheat contract down A$10/t to 429/t;
• ASX Jan 2023 wheat contract down $10/t to $448/t;
• AUD dollar weaker at US$0.688.

International

More of the same. The reason for the removal of nearly all the war-risk premium built into agricultural markets is almost unimportant. Once the charts sustain enough damage, the move becomes cause and effect. A self-fulfilling prophecy. There are reasons, don’t get me wrong. Year 10 economics tells you to buy commodities when rates are low and dump them when this reverses. Global inflation has all countries extremely focused on food inflation and everything that can provide relief is back on the table, including bio-fuel mandates. Chinese macro health has long been a barometer for fair value in agricultural markets and, with lock downs set to continue into the October elections, things look sluggish at best. However, there are also reasons the move has overshot. Acceptance that the Russian export program is business as usual has some hairs on it. Clearly there are plenty of countries that are more focused on getting supply than they are worried about breaching sanctions, so this idea is not ridiculous. However, with the war getting worse and the west setting the precedent of ratcheting up sanctions, it makes sense that some risk premium remains. The Ukrainian export corridor has been the mill stone around the markets neck, but the reality of executing and paying “someone” carries some meaningful challenges. Argentina, EU and parts of the US have some production challenges, and, during this break, the global buyer is sitting back. Catching a falling knife.

China’s commerce ministry said the sooner US tariffs on Chinese goods are lifted, the sooner consumers and companies will benefit. It says removing all additional tariffs on Chinese goods would benefit China, the US and the world. The comments come on the heels of US Trade representative Katherine Tai on Wednesday saying the US should keep tariffs on Chinese goods in place as “a significant piece of leverage” against Beijing. She also said lifting the tariffs would have limited impacts on controlling short-term inflation

Next week will see the quarterly stocks in all position and planted area report out in the US. This is a significant report and will give us a look at the prevent plant acreage which will drive US balances. We will circle back with our outlook but it’s an interesting time for the market to absorb a report post a $1/bu break.