Daily Market Wire 27 September 2022

Lachstock Consulting September 27, 2022

Extraordinary flight towards US currency saw US wheat markets fall another 2pc.

  • Chicago wheat December contract down US22.5 cents per bushel to 858c/bu;
  • Kansas wheat December contract down 21c/bu to 929.5c/bu;
  • Minneapolis wheat December contract down 18c/bu to 931.25c/bu;
  • MATIF wheat December contract down €2/t to €344.25/t;
  • Black Sea wheat December contract down $1.75/t to $322/t;
  • Corn December contract down 10.5c/bu to 666.25/bu;
  • Soybeans November contract down 14.5c/bu to 1411.25c/bu;
  • Winnipeg canola November 2022 contract was up C$7.30/t to $826/t;
  • MATIF rapeseed November 2022 contract down €18.25/t to €588.50/t;
  • ASX Jan 2023 wheat contract down A$6/t to $430/t;
  • ASX Jan 2023 barley contract down A$0.40/t to $316/t;
  • AUD dollar weaker at US$0.646.


It is all about macros. The global repricing is not done. The S&P index now is some 23% off the highs earlier in the year and the US dollar is making fresh highs against a bunch of currencies. All this, with a backdrop of war, makes these tough markets. 

The referendum in Russian-occupied Ukraine is underway and some sort of clarity should emerge mid-week. It is hard to say what it means for agricultural markets with some drawing parallels back to the Crimea referendum back in 2014 when, after a brief rally, ag markets lost over $2/bu post that event as the supply chain returned to normal. I find that hard to use as the analogue given the amount of infrastructure damage coupled with a distinctly more aggressive western sanction program. Back in 2014 it was reported that 83% of voters turned out and 97% voted to integrate into Russia. Interestingly the Ukrainian government has instructed men of fighting age within the areas undertaking the referendum to leave given that, should the vote be positive, there is an outside chance they will be conscripted to fight against Ukraine. 

It is hard to think about fundamentals now but Argentina and HRW wheat areas are both looking for a drink. Australia, for the most part, is wet. 

China buying has been slow. The rampant US dollar will not be helping because it has deeply skewed import prices. As a result of the slow soybean import program, domestic soybean meal values are skyrocketing. China hog futures have returned to retest the July highs. 

The reports for month-end and quarter-end are imminent. At the end of this week USDA will release its stocks in all positions report and wheat production data.


Local markets returned from the long weekend with current crop quality wheat firmer. Early trading on Clear Grain Exchange for H2 in Melbourne zone is up approximately $20/t week on week and ASW1 in Victoria nearby continues to attract a bid. 

New crop grower bids were relatively unchanged to a touch firmer. Liquidity remained thin for now. Canola price movements also lagged. 

Scattered showers pushed through parts of SA and VIC yesterday with falls of up to 5mm being recorded in the past 24 hours. Conditions remain overcast throughout today. 


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