Commodity market moves overnight were small. The US dollar index gained and the Dow Jones Industrials Average eased almost 1 percent.

• Chicago December 2024 wheat up US2.5c/bu to 578.5c/bu;
• Kansas Dec 2024 wheat down 1c/bu to 585.5c/bu;
• Minneapolis Dec 2024 wheat down 1c/bu to 615.5c/bu;
• MATIF wheat Dec 2024 up €0.25/t to €223.75/t;
• Corn Dec 2024 up 2.5c/bu to 419c/bu;
• Soybeans Nov 2024 up 5.75c/bu to 997.5c/bu;
• Winnipeg canola Nov 2024 down C$0.50/t to $632.20/t;
• MATIF rapeseed Nov 2024 down €1.75/t to €509.75/t;
• ASX Jan 2025 wheat down A$1/t to $326/t;
• ASX Jan 2025 barley up A$1/t to $283.50/t;
• AUD dollar down 48 points to US$0.6634.

The day ahead

Weather – The winter wheat areas of the US are the number one concern at the moment. From a topsoil perspective, the outlook should see 70pc of the winter wheat belt in the “very dry” bucket. South American row crop conditions are improving, allowing the gap between this year’s terrible planting pace and normal close a little. 

Markets – It was all about softs last night – Sugar and coffee were well bid while Palmoil posted 2-year highs. It is the perfect storm for palmoil, tight supplies and robust demand. Indonesian production is pegged at 51Mt vs 54.8Mt in 2023. This adds to the support in the veg oil space as the northern hemisphere heads into winter. It is generally a seasonal downturn for palm. The Australian dollar has no friends – none. Existing home sales in the states were just below expectations, jobs data out later. Locally, Judo bank PMI was slightly higher than last month, but it is all about CPI out on the 30th. 

Australian day ahead – Lower AUD, flat offshore, harvest getting underway – largely unchanged in wheat and barley. Canola will be interesting – yesterday marks A$100 rally since mid August in Geelong new crop. Growers are engaged but clearly this is not satisfying the demand. Palmoil making 2-year highs won’t hurt.

International

Just when you thought the US election couldn’t get any weirder…. Texas Attorney General is suing the Biden-Harris administration for not verifying citizenship of 450k “potentially ineligible” voters. How you can get a balanced independent opinion of this election is beyond me – the Wall Street Journal now has Kamala back in front, Polymarket has Trump at 62.3pc favourite.  

Hezbollah have confirmed that a possible successor to the groups killed leader, Hassan Nasrallah, was also killed in an attack in Beirut. Energy markets have been one of the few following this dispute, albeit somewhat tenuously. Dec-24 Crude has consolidated around the US$70/bbl after posting a $77.70/bbl high earlier this month.  

Kazakhstan’s Trade Ministry says it sees 2024 wheat export potential at 7 to 7.5Mt. The European Union says soft wheat exports since the start of the marketing year are 7.02 million tons, 3Mt less than this time last year.  

The Russia wheat price index, used to calculate the weekly export tax continues to rally. This creates an interesting situation – rapidly rising taxes create uncertainty for exporters, forcing them to deal closer to the spot which then causes the curve to build in premium.  

French winter crop planting is off to its slowest start in years – currently pegged at 10pc vs the 5-yr average of 36.8pc.

NOAA forecasters are predicting a strong likelihood of La Niña developing this winter, which could worsen the already dry conditions in key winter wheat-growing regions across the US Plains.  

According to the latest winter outlook, there’s a 60pc chance La Niña will emerge between October and November, increasing to 75pc by November through January. La Niña typically brings drier, warmer weather to the southern U.S., and this could intensify existing droughts in the Great Plains. It’s also expected to trigger new drought conditions in the Southwest, Southern Plains, and parts of the Southeast, creating challenges for farmers and the agricultural sector. These dry conditions could significantly impact winter wheat production.