Overnight markets:

Grains posted slight gains, while oilseeds were mixed.

• CBOT Wheat up 2c to 504.75c
• Kansas wheat up 5.5c to 508c
• Corn up 1.75c to 387.75c
• Soybean up 6.25c to 1000c
• Winnipeg Canola up 6.40$C to 509.1$C
• Matif canola down -1.75€ to 363.5€
• Dow Jones up 11.58 to 21722.59
• Crude Oil up 0.25c to 49c
• AUD down to 0.796c
• CAD up to 1.256c, (AUDCAD 1.000)
• EUR down to 1.167c (AUDEUR 0.681).

Soybeans

Soybeans were firmer as the dry outlook for August is creating concerns for yields in the key production period. Export sales were 303.4k in old crop and 531.8k in new crop. The old crop number was above market expectations, with new crop also slightly higher. Beans have a lot of associated risk at the moment, so it’s surprising they weren’t higher today. Expect a volatile weather over the next two weeks as we get further clarification on August weather.

Canola

The Canola remembered poor prairie conditions and the tight old crop situation to post a higher close. Saskatchewan crop ratings continue to grind lower with estimates of 60% of the cropping area low on moisture.

Corn

Corn slightly higher as the moisture in the forecast didn’t eventuate. As said yesterday, corn will chop and follow beans and wheat until the August 12 USDA report. Export sales were slightly disappointing at 92k old crop and 486.6k new crop, vs ideas of 350k old and 300k new.

Wheat

Wheat higher across all classes with spring wheat leading the charge. The crop tour results reported yields at 38.1 vs USDA at 40.3 bushels per acre. The Canada crop is declining with ongoing heat and the rainfall in northern Europe and the Baltics is potentially reducing a balance sheet with very little wriggle room. Export sales were slightly above expectations at 498k, consisting of 151.4k HRW, 54.2k SRW, 140.5k white wheat and 151.9 of HRS. Implied vol in Sep SRW went out at 24%. US basis has been under a lot of pressure of late, getting to a point where some classes are competitive vs Russia. The balance of exportable surplus in these two nations suggests that demand should be hand to mouth, which could see a grind lower in cash pricing.

Australia

The 8 day Aussie forecast looks to be bringing 15-25mm of rainfall to all of the moisture needy production regions. The standout is in NSW where the coverage has increased significantly. This will provide a good relief to moisture stressed crops and also lay the foundations for further yield increases if follow up rains are received. This comes at a good time, with the BOM yesterday calling for below median rainfall in their 3-month outlook. Cash have been on the defensive since Tuesday, with new crop Aussie basis thought to have done enough work for now.

Source: Lachstock Consulting