Memorial Day public holiday saw US markets closed on Monday.

EU wheat was firmer and canola rapeseed weaker.

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• MATIF wheat September contract up €1 to €189.25/t;
• Winnipeg canola July contract down $C3.30 to $460.20/t;
• MATIF rapeseed August contract down €1.75/t to €373.75/t;
• Brent crude July contract up US$0.40 per barrel to $35.53;
• AUD firmer at $0.6550;
• CAD firmer at $1.3972;
• EUR weaker at $1.0903.

Markets

WCE Canola softened -3.3 CAD/mt closing at 460.2CAD/mt with Matif Canola finishing lower by -1.75 Eur/mt. In outside markets the Aussie was 0.0009 points higher to settle at 0.65447, the CAD softened -0.0016 while the EUR gained 0.0001.

US markets were closed for the Memorial Day long weekend and there’s little in the way of commodity input. Russia said it had met its agreed OPEC+ cuts, meaning the global oil market could return to balance around June or July. With much of the world’s oil exploration breaking even at US$40/bbl the test for the market will be how quickly suppliers can react to any meaningful price rally.

The contagious impact of a Trump tweet to the Australian economic outlook has been largely benign. The debate around key metrics such as the AUD’s ability to maintain strength will be driven by, simplistically, China growth. The bullish argument centres around the stimulus measures China will adopt over the near term which reportedly be heavy in infrastructure spend. Generally, this has been supportive for the AUD with large iron ore offtake, potentially magnified given COVID-forced supply restrictions from Brazil. However, the bears are focused on the financial reality of a global shut down on the Chinese economy and history suggests, if they get a sniffle, Australia gets a cold. ANZ along with some of the major investment banks have a longer-term bearish view of the Yuan based on their China growth opinion however, with US/China tensions increasingly it could be more about a tweet.

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Australia

Markets started the week a touch firmer on the cereals for new crop, we saw southern wheat and barley markets up $1-2/mt. Oilseeds we also firmer across the board with 20/21 season canola track Victoria up $2-3/mt on the grower bids. There was limited liquidity across large parts of new crop markets. In old crop we still see small parcels of wheat and barley trade for nearby delivery positions. A large percentage of growers are coming to the end of their seeding programs which means those in southern NSW and Victoria would get a well-earned rest by the end of the week. We continue to see showers push across SA and into western Victoria later in the week. Paddocks in the Western Districts of Victoria will start to get very wet. WA continues to get follow-up rain this week.

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