Markets continued to trend slightly higher with the ongoing hurricane talk and sentiment was boosted by speculation about row crop yields, USDA field observations commencing for the Sept report.

The USD index has broken back under 93, with the AUD at 72.3¢, the CAD $1.315, and the EUR $1.183.

Hurricane weakening

The latest forecast for Hurricane Laura has it moving up roughly along the LA/TX state line before weakening out and turning NE towards the Ohio River Valley. Impacts to the main corn and bean crops still look likely to be minimal, with the heaviest storm forecasts dropping off before it moves into central MO.

It is reported that 10-15pc of total US crude oil refining capacity is already shut down for the storm.

Still a quiet market on the ag side. We know the macro stories, but markets right now are in wait and see mode until we start hitting more corn and bean harvest and yield ideas get adjusted.  The USDA is still two weeks away from the next WASDE. StatsCan will update field crop estimates on 3 September.

Wheat planting moisture sub par

The latest weather runs are still only calling for half an inch or so of rain in western KS and the panhandle off this storm system.  This was not as much forecast rain as many had hoped for going into winter wheat planting, and the two week outlooks are dry.

Winter wheat crop insurance for most of the US is currently in “price discovery” mode. Current prices are up some 40¢/bu on Hard Red Winter wheats (HRW) vs last year.

Flash sales out from the USDA had 400,000t of Chinese bean demand, with ongoing rumours that more is yet to come.  No corn has been seen yet. There’s speculation that part of the wheat rally has come from Chinese demand for HRW. Soft Red Winter wheat dreamers seem less prevalent these days.

US ethanol production was up 5000bpd to 931,000, and stocks climbing to 20.4 million barrels.  This comes even after the rally in gasoline demand returning towards March levels.

Reported Russian spring wheat yields have dropped in some places yet again, raising a few questions around about the potential for markets to have over corrected to the upside on the crop.

Australia

Some areas in NSW did end up reporting more frost damage yesterday, with talk that consecutive events had compounded impact.  Still a number of days before true impact becomes clear.

Wheat and barley markets ticked higher again after the board move yesterday. Canola continued to push higher with the global moves, up $2-3/t yesterday.