International

The Bloomberg Commodity Index shows grains futures are at their lowest in 14 years relative to other commodities, in which indices for soybeans, corn and wheat in Chicago and Kansas fell to the lowest valuation since 2010 relative to the other groups of raw materials.   

According to the August edition of the European Commission’s MARS update, yield forecasts at the EU level for almost all crops have been revised down due to exceptionally hot conditions in the south and excessive rainfall in the north. The poor performance of winter cereals (in particular soft wheat and winter barley) is mostly due to excessively wet conditions affecting large parts of western and northern Europe. Summer crops were affected in regions where the hot conditions coincided with limited water availability, as was often the case in Hungary, Romania, Bulgaria and Greece. The total EU wheat yield was revised down 3pc from July, now 3pc below the 5-year average. Total barley yields were revised down 2pc but are still above average, reflecting good spring barley yields offsetting poor winter barley. Corn yields were revised down 3pc, now 4pc below the 5-year average and canola yields were cut by a further 1pc now 3pc below average.

Indonesia’s new president hopes to implement mandatory 50pc palm-oil-based biodiesel blending by early next year, which he said would cut fuel imports by US$20 billion per year. Indonesia said last week it planned to raise the blending to 40pc in January 2025, from the current 35pc, in an effort to reduce fuel imports and lower emission from fossil fuels. Tests have reportedly already started on the higher blending preparation. 

Jordan’s state grain buyer has issued an international tender to buy up to 120kt of milling wheat from optional origins and 120kt of feed barley.

Australia

Widespread soaking rains remained elusive across most of Southern Australia this past week, with rainfall totals in SA particularly disappointing. Crops are starting to struggle as recent warm and windy weather reveals the extent of rainfall deficits in many areas, with wind again forecast this week. 

Queensland is looking set for a warm and dry week this week with temperatures expected to be above 30 degrees for most of the week and very little rain forecast.

The Darling Downs market looks to have found a level of support with new crop bids steady around A$305/t for wheat and barley, despite futures moving lower and the Aussie dollar moving higher yesterday.