Wheat markets have taken a sudden hit as CBOT called it a day with its second weakest close of the month following weakness in corn and beans.

There is a lack of fresh fundamental news at the moment but the recent headline items for wheat start to look bullish quality wheat with Egypt back in the game, Indian exports soldiering on, flood potential and crop losses in Australia, the lack of quality around the globe and significant declines in US acreage.

CBOT Wheat was down -8.25c to 419.75c, Kansas wheat down -7.25c to 430.75c, corn down -7.25c to 339c, soybeans down -9.5c to 951.5c, Winnipeg canola down -$C0.9 to $C467.4, and Matif canola down -€2 to €373.75. The Dow Jones down -166.62 to 18094.83 , Crude Oil down -0.24c to 45.69c, AUD down to 0.7634c, CAD down to 1.3223c, (AUDCAD 1.0095) and the was EUR up to 1.1252c (AUDEUR 0.6784).

Indian importers have dipped their toes in the water after the reduction in import tax and purchased around 25k of Australian wheat. This recent development will generate significant interest in the coming weeks with India’s upcoming festival season just around the corner. It is known that India have massive stockpiles of grain, but there is still a notable lack of quality. The Black Sea, Europe and Australia are the likely suppliers.

There has been little action in the corn market as the harvest outlook is improving and yield expectations are promising in Illinois and Iowa. With a dryer week on the horizon, inroads into the corn harvest will improve, as it currently sits at 15% vs a 19% average.

Domestically, ASX Jan17 wheat strengthened $4 to $233 amidst growing rain and frost concerns.

The next week is shaping up to be very telling with heavy rainfall making its way to the already water logged Central West in NSW.

After areas of Central NSW have experienced extensive crop losses and over 100 homes and businesses have been affected by the floods, a natural disaster is expected to be declared in the coming days. With the expected rainfall coming in the second half of this week, the Lachlan is expected to peak again near Condobolin and Euabalong.

• Source: Lachstock Consulting