Weather: Weather continues to be a non-event according to the market. At some point we will stop talking about the cold in Russia and go back to focusing on boring old rainfall. Aussie rainfall has moved to the coast – heaps of rain in the back end and while it has moved across to the east coast – hopefully it reaches in a little.
Markets: The bleed continues. Risk premium is not needed it would seem – probably a little pre-emptive given we are about to head into the last quarter.
Australian Day ahead: The old crop market has been well supported but has had to answer the question – what would 2 inches across the east coast mean to value? The rest of the country is pretty skint for the next 15 days according to the GFS.
Offshore
December25 futures contract price Chicago SRW wheat over the past 12 months, expressed in Australian dollars per tonne. Source: Bloomberg and Lachstock Consulting. Click expand.
Tariff uncertainty reigns with President Trump indicating he was serious about just delaying the Mexican and Canadian tariffs. It has the market rattled. He keeps the world guessing however, giving two contradictory answers yesterday – the second of which would mean he has already given them both another month. FWIW – I am, for better or worse, in the “No Tariff for Canada” camp – with falling confidence… but I’m still in the camp.
Black Sea/Romanian wheat values are firm, despite the cleanout in US futures. The fact Russian exports are limited takes the pressure off, although, it’s not like demand is crawling over itself to get covered – things feel pretty balanced right now.
Oklahoma wheat conditions fell from 40 percent good-to-excellent through Jan to 33pc for the week ending the 23 Feb. Topsoil moisture was quoted at 39pc short-to-very-short vs last year at 17pc. KS and TX will report next week.
US corn is in the box seat globally, pricing ahead of South American offers. Argy is set to get a bucketload of rain with some suggesting it could actually cause some flooding – rain means grain, or so they say.
Brazil beans look amazing with just under 40pc in the bin.
Qantas will pay its first dividend in 6 years. Maybe adding a few more people to answer the phone on the help line might be a good idea… Qantas… are you listening?.
Australia
Yesterday saw canola bids work a little higher in the west to around A$860 FIS, wheat was firmer to be bid $376 with barley unchanged at $348. New crop canola bids were stronger bid $810 with GM $745 and wheat was $392.
In the east of the country canola bids improved to be bid $783 with GM $670, wheat was unchanged around $347 with barley $318. New crop canola bids are around $772 with GM bids $685 and wheat $368.
Domestic grain markets have remained steady despite the global prices working lower in recent days highlighting Aussie competitiveness into Asian destinations and strong domestic demand through the east coast which could see prices push higher in the coming month.
With the March tariff deadline approaching, domestic canola markets have held firm despite global losses. The local balance sheet remains tight, as the export program is well advanced across most states, with a significant portion of this year’s production already sold.
Victoria canola export by month (thousand tonnes). Pace in 2024-25 (red and black dotted line) exceeds previous year (blue line) and 5-year average (grey dotted line). Source: Lachstock. Click expand.
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