Markets

The wheat market rolled over into week’s end with little in the way of resistance. Any strength garnered on Thursday via a firmer cash market was extinguished as harvest pressure took hold. This is a big week for data with StatsCan out tonight with their ideas of planted area in Canada and tomorrow night USDA will release its stocks and acreage report which will provide the market with USDA’s idea of row crop acreage.

For wheat, it’s all about demand erosion, i.e. how much corn was fed when wheat price versus corn was at greater than US$2/bu differential. The June report historically has moved the market and, with the uncertainty generated by COVID and its impact on price, this time it could throw up anything. The average trade guess for corn acres is 95.2 million acres (Ma) vs USDA’s March guess of 96.99Ma (2019 final acres = 89.7Ma). Average trade estimate for beans sits at 84.716Ma vs March USDA of 83.51Ma and 2019 final planted area of 76.1Ma.

Weather is largely benign, but for corn crops we are now entering the pollination window on the longer-range forecasts, and this could be the only thing that saves corn prices from more downside. It’s all about temperatures through this period, overnight temperatures in particular, so there is still the possibility for a twist or turn to come.

Germany through to Lithuania will get a bunch of rain in the next 15 days which will have mixed results on a crop trying to finish. Argentina still has pockets of dryness through the wheat belt which will take the upside off estimates but, outside of these few areas, global weather is largely okay.

Australia

Queensland is looking for a drink but, luckily, temps have been pretty stable and no risk showing in the 15-day outlook.

The weekend brought some sunshine to the southern Australia while there were some cold starts to the mornings through parts of NSW cropping regions. Daytime temps in the teens through the southern belt continue to keep the crops happy. Plenty of urea has been applied, growers now chasing yield to compensate for recent price drops in the new season markets. Western Australia received some coastal showers in the past 3-4 days with the forecast remaining positive leading into this week and hopefully continues to fill in the gaps. NSW and Qld have a dryer outlook for the next 10-12 days for NSW. Markets remained relatively steady last week, with some up and down trading days. New crop upcountry SA, Vic, and southern NSW markets remained mostly offer side. Old crop grain offers for the July and August delivery slots might emerge soon with the approach of the end of the financial year.