Ukrainian local officials said missiles from a Russian submarine hit port infrastructure in the Odesa region overnight, damaging a cargo terminal and killing a security guard. Russia’s Federal Security Service (FSB) said it found traces of explosives on board a foreign vessel enroute from Turkey to Russia that had previously entered a Ukrainian port. It was the second such announcement this week involving a foreign ship heading to Russia to pick up grain. FSB said on Monday it had found traces of explosives on another ship travelling from Turkey. 

President Putin stated at the Russia-Africa Economic and Humanitarian Forum that Russia will not rejoin the Black Sea grain deal, accusing Western nations of being the primary beneficiaries of Ukrainian exports while maintaining sanctions on Russia. He said Moscow would move towards a fairer system of resource distribution and that Russia was prepared to provide 50,000 tonnes of grain each to Burkina Faso, Zimbabwe, Mali, Somalia, the Central African Republic and Eritrea in the next three to four months, with promises of free shipping.

The Saskatchewan Crop Report noted that crop yield potential has decreased in many parts of the province due to the dry heat. It said producers were hoping for more rain before harvest to finish seed filling. Cereal crops that cannot be harvested due to dry conditions and grasshopper damage are being salvaged for livestock feed to support neighbouring livestock producers. There were several storms throughout the province this past week. Some resulted in rainfall amounts up to 37 to 40 mm which will give crops some reprieve from the heat stress and encourage seed fill. Spring wheat is rated only 35pc good to excellent, down from 50pc two weeks ago. Canola is also at 35pc good to excellent.

US corn crops experiencing moderate to intense drought rose by 4pc, versus the previous week, to 59pc. This increase follows three consecutive weeks of decline. Soybean crops in drought rose by 3 points to 53pc. Spring wheat showed the biggest increase among major crops, deteriorating 12 points to 43pc. 

According to the president of the Russian Grain Union 2023-24 grains exports could reach up to 60Mt.

The Taiwan Flour Millers Association reportedly purchased an estimated 108,000t milling wheat from the US for Sep/Oct shipment from PNW ports, including DNS (14.5pc min. protein content) at $379.41-$387.29 c&f, HRW (12.5pc) at $366.56-$371.22 c&f and Soft White Wheat (8.5pc-10.0pc protein range) at $318.76-$333.01 c&f. 

Australia

Yesterday’s Australian market was quiet, partly attributable to the knife-edge balance of seasonal conditions and partly to the annual Australian Grain Industry Conference taking place this week. Export parity calculations are arguably in the black ex WA and SA. In the eastern states, however, prices still are reliant on the domestic consumer to support current values. In fact, once grade spreads are applied, feed grades are extremely close to pricing from west to east via ocean freight. 

Rainfall forecast in WA continues to build although the biggest expectations remain coastal.  

Much has been made of the anecdotal observations of bunkers across the east coast. Sites such as AWB Dimboola and Viterra Tailem Bend still look relatively full. When comparing ending stocks number against this observation and you quickly get more questions than answers. Lachstock Research is looking for around 400kmt in both of these states for wheat carryout. Maybe the trade/end-users have taken advantage of the recent times the market has traded above full carry and this grain is actually earmarked against new crop use?