International

Wheat contracts traded large ranges, initially sold off on the announcement by the Russian Defence Ministry opening sea corridors for international shipping from seven Ukrainian ports. On face value, this would provide welcome relief to an extremely tight global balance sheet. However, this may not be a  simple process.

As futures trading sessions progressed, more reports from those closer to the Ukraine situation indicated a shipping corridor is only part of the problem – cleaning up the port, not endangering locals that would be operating the port, and physically getting grain to port all have a huge question mark over them. Ultimately, market direction will be dictated by those who believe Russia is committed to the humanitarian element, and global pressure to help, and those who simply believe this is propaganda in what will be a long, drawn-out war.

The Indian Government announced it would not be lifting its export ban any time soon. At the same time, the USDA attaché cut its estimate of the Indian wheat crop from 108.5 million tonnes (Mt) to 99Mt, which equates to India’s exportable surplus being removed.

More rain is forecast for the US Hard Red Spring wheat areas into the beginning of June, with the same wet pattern pushing into Canada.

Brazilian corn basis continues its march higher post the phytosanitary agreement with China.  Interestingly, China has been a vocal supporter of the Ukraine export corridor, as it still has a meaningful exposure to existing purchases from the war-torn country

Australia

Local markets again were a touch softer on the bid side and the liquidity in depot stores has slowed as the trade is now starting to get more inquiry from the grower on delivered parcels for June. New crop markets were a tad softer over the day on wheat, barley and canola

The Western Australian grain-belt is off to a near perfect start with most regions having reserves of sub-soil moisture from autumn rainfall and with a few top-ups that could not have been timed better. Planting is pretty much done and the vast majority of the crop will be in the ground and up by the end of May or early June.

The start in South Australia has not been quite as good but planting has progressed well with plenty of dry-sowing activity ahead of the rainfall event forecast for the coming week, and roughly 65-75pc of the SA crop already planted. Conditions in New South Wales are mixed, with most canola that is going to get planted in the ground and cereal crops nearly done; the exception is areas that have been too wet to plant through parts of the central west and north. Parts of Queensland are in the same boat as NSW – plenty of potential but too wet to plant  .

Showers are expected to continue this week throughout the winter cropping belt with the highest rainfall totals expected to build from Sunday into next week in SA, Victoria and the southern half of NSW.