Mixed but mostly stable markets overnight. US wheat and beans weakened, canola firmed.
- Chicago wheat July contract down US5.5cents per bushel to 1085.75c/bu;
- Kansas wheat July contract down 12.75c/bu to 1141.25c/bu;
- Minneapolis wheat July down 7.25c/bu to 1191.5/bu;
- MATIF wheat September contract up €6.75/t to €385/t;
- Black Sea wheat July contract up $4/t to $368.75/t;
- Corn July contract up 1.25c/bu to 813.5c/bu;
- Soybeans July contract down 8c/bu to 1684.75c/bu;
- Winnipeg canola November 2022 contract up C$11.50/t to $1124.10/t;
- MATIF rapeseed November 2022 contract up €2.25/t to €857.25/t;
- ASX July 2022 wheat contract down A$2.5 to $415/t;
- ASX Jan 2023 wheat contract down $0.3/t to $426/t;
- AUD dollar weaker at US$0.709.
Wheat markets lost ground overnight as the prospects for badly needed rainfall throughout the Hard Red Winter wheat belt improved, albeit still in the forecast and not yet realised. Unfortunately for the total wheat balance sheet, it also brings more moisture in the north and bitterly cold conditions, once again hindering planting conditions. As with any rally, the constant question is, are the markets doing what they need to do – ration supply? If the US export sales are anything to go by, then the resounding answer is, well and truly. The US sold a dismal 32,300t old and 124,300t new. To hit the USDA target for old crop, the US needs to be punching out 362,000t a week. Not that the US featured in Egypt, but the announcement that they have approved Indian wheat shows the efficiency a higher market brings
Corn balances get a run in every wire, every day. Conjecture over the shape of the global numbers if the US doesn’t perform quickly become unsolvable – yet the money continues to flow into wheat. There seems to be an acceptance that this will bite, eventually
Ukraine’s Ag Minister reported spring planting progress from April 21-25 at 570,000t. This pegs the total spring plant at 3.6mha or 25pc of the anticipated footprint prior to the war. Interestingly he also suggested that they could get 75pc in the ground assuming a status quo.
Local markets continued to firm, and liquidity picks up. Wheat in South Australia saw sharp gains across the boards with quality milling wheat prices up $10-15/t. SFW and lower grade wheat continues to find a home in New South Wales while that market was also up another $5/t. Barley liquidity stills remains tight as values are stronger over the week. Canola values were a touch softer yesterday on the bid side liquidity now thin also through the current crop market
Some climate models are predicting a rare third consecutive La Niña event this year. Although the current event is weakening, it continues to assist in plenty of rainfall developing over Australia which is setting up a third bumper winter cropping season – albeit a little too wet in parts of NSW. In Victoria, the BOM is expecting to issue flood warnings over the weekend as heavy rain makes its way south. Parts of Western Australia have enjoyed a near ideal start to the cropping season, with over 100mm for this month at Geraldton and 60mm at Merredin in the Wheatbelt. SA is the only state where more rain is needed, particularly parts of the Yorke Peninsula and the Lower North.
It appears that initial thoughts about high input costs potentially impacting planted area are being balanced by high prices and good opening rainfall, with plenty of optimism about the season ahead.