This time for sure Rocky. In what has become an almost predictable outcome of a Russia/Ukraine lead rally, US futures gave up. Nuclear power plant threats, bridge bombings, infrastructure damage and even a direct mercenary threat to the Russian leader are good for 2-3 days of excitement. Then, as if the markets are simply bored, gains are reversed and the bulls are left searching for a reason to justify risk premium. The odd part about this consistent price action is that the fundamentals that spark the initial buying have generally remained in play when the selling pressure shows up. Last night is a classic example. Romanian execution via the Danube is now a dicey proposition with the few vessels still in the area only moving in daylight hours. 

A new NATO-Ukraine council was established and convene immediately to discuss the security of Ukrainian grain exports and Black Sea ports. 

Rice prices in Asia continue to firm following last week’s announcement by India to place a ban on its non-basmati rice exports. Prices for Thai white rice 5% broken, an Asian benchmark price have jumped to $572 which is the highest level since April 2020. 

The latest Manitoba Agriculture, Food and Rural Development crop report shows an estimated 70% of crops across the province are flowering or pod filling with most fields seen in fair to good condition. Variable levels of rainfall were observed across the region, with most precipitation in parts of the northwest. 

On the list of weather concerns however, Canadian conditions are described as variable (at best), US spring wheat areas are all over the shop and the export ban in India casts a shadow over their wheat production figure. 

US is in the middle of a heat wave with Iowa, Missouri and southern Illinois getting belted with wind and heat. Late July, early August is the key determinate of corn yield with low overnight temps needed. USDA is sitting at 177.5 bu/ac but the market would be 172-175 – all else being equal, a 5bu/ac yield cut takes US corn ending stocks from 2.26 bbu to 1.8bbu. 

China and Russia continue to hold a number of joint naval and air drills in the Pacific. While the Chinese state announced that these drills are not aimed at any outside power, it clearly signifies a deepening relationship.

Australia

Local markets were mixed yesterday. Most bids lower across the board on the east coast for both current crop and new crop. ASX wheat Jan24 closed at A$415/t. 

WA new crop prices were $5 lower yesterday on both APW MG and canola, Kwinana was $420 and $790 respectively. Current crop markets unchanged for barley remaining in the $300-305FIS main ports and wheat current crop $390-400 range for APW1. 

The RBA’s preferred measure of underlying inflation, the trimmed mean, increased by 0.9%/ quarter and the annual rate moved down to 5.9% (from 6.6% in Q1 2023). 

With the GTA annual conference on, liquidity maybe a little thin. Plenty of Lachstock representation so please say Gday.