International

Black Sea wheat was down US$2/t.

Soybeans and corn are both showing themselves as overbought, and most of the flow in overnight trade was focused on taking some chips off the table ahead of next week’s USDA WASDE report. Corn has had a solid demand base which has underpinned the buying, but it makes sense that the trade takes advantage of the recent strength. However, even with a heavy technical background, soybeans can’t break. The heat and dry condition persist in Brazil, Paraguay and northern Argentina. Updated rainfall shows some relief in Brazil but nothing in Argentina.

The Wall Street Journal has had a crack at forecasting US export sales this week: wheat at 825,000t, corn at 1.4 million tonnes (Mt) and soybeans at 1.65Mt. This would be bullish no doubt.

Wheat lacks a fundamental at the moment outside of the Russia-Ukraine dispute. Yes, wheat will follow corn and soybeans and all the growing risk is in front of US futures, but wheat needs another spark to take a leg higher.

The Chinese New Year period has historically been a quiet one for export business, and any business would be therefore be viewed as even more bullish.

Australia

Markets remained largely unchanged for wheat and barley.  Canola showed some more strength as we now see depot site bids through Victoria push up to $800/t or better.

Scattered showers are pushing across South Australia this morning, while more rain is rolling through the regions where sorghum is being harvested.

Road freight still remains tight going into Feb and March with big export programs ongoing, and domestic interstate movements happening from New South Wales into South Australia.