Soybeans lifted 3pc, canola strengthened another 2pc, corn lifted 2pc and wheat was mixed.

International

In the wheat pits Chicago settled down -1.25 usc/bu closing at 732.25usc/bu, Kansas was -0.25 usc/bu lower to settle at 717.25usc/bu, while Minni rallied 5 usc/bu to go out at 910.75usc/bu. Corn gained 9.75 usc/bu to go out at 545.25usc/bu while beans were up 39 usc/bu to settle at 1331.75usc/bu WCE canola rallied 22.2 CAD/mt closing at 898.3CAD/mt with Matif canola finishing higher by 10.25 Eur/mt. In outside markets the Dow Jones gained 30.55 points, crude was up 1.9 bbl the Aussie was 0.0052 points higher to settle at 0.72579, the CAD softened -0.0058 while the EUR gained 0.0009.

Row crops found a bid last night as the market digested the sliding crop condition ratings released after the close on Monday, the weather forecast turned hot and dry and buyers took on additional risk.

Mexico bought some US corn. The corn market is a space in which buying activity from China usually dominates. Despite China continuing to show interest it has not bought for a while. Total US new crop corn sales to date amount to 18.5 million tonnes (Mt) practically  equal to last year’s record forward sales. This compares with full year USDA forecast corn exports of 26Mt.

With crop conditions sliding the spread between condition-based models and boots-in-the-field models continues to widen. Crop analyst Michael Cordonnier pegs the national yield at 175.5bu/ac.

Harvest of palm plantations in Malaysia and Indonesia is being hampered by the COVID-19 delta variant. Despite lower palm oil prices last week, values have turned firmer in recent days.

As the world unpacks President Xi Jinping’s “common prosperity” definition there is an air of uncertainty in agricultural commodity markets. Coupled with a quite public and transparent crackdown on commodity speculation, the evolution of the Communist Party’s directive for a more equitable allocation of wealth falls short of clearly outlining the implementation. The agricultural sector is not immune from those with what would be regarded as having extreme wealth. Does the shift in narrative impact trade flows? Could the desire to improve the lives of those less fortunate actually increase the requirement for imported grain? How will this goal affect Australia’s prospects given its reliance on China commodity buying? While these questions need answering, if nothing else, it is telling that the Australian and global agricultural markets are extremely reliant on China.

Australia

Local cash markets were a fraction stronger across the day on both new and old season, however liquidity in the trade has been thin. Grower activity on new crop has been quiet so far this week. Do we see more confidence given the recent rainfall through NSW in the past 48hrs with growers stepping back in for another round of selling at current values or if we leg another step higher over the coming week or two?

Old crop bids continue to come to the table for September onward for cover as those bids take a step higher by $5/t along the east coast and the domestic South Australian market. SA remains very tight and, with values around $385-390 on wheat, it continues to open up that Victorian drawing arc on grain to flow back into SA.

The early crops up in northern NSW and Queensland are now coming out in head and looking fantastic, but big bulky crops will need a kind finish as always. Frost risk remains on the cards towards the back end of this week through parts of NSW we will be watching closely. It still feels like there is enough moisture underfoot through WA, SA, and parts of Victoria at the moment to minimize that risk over the next week or so.

Scattered showers are predicted over the next 8-10 days for southern parts of WA, SA, and 5mm across most Victorian cropping belt.

Source: Lachstock Consulting