Markets

Daily Market Wire 3 February 2025

Lachstock Consulting February 3, 2025

 

The day ahead

South America next week temperature maximum (left) and anomaly (right). Argentina has forecast maximum about 4-8 degrees above normal. Source: NOAA. Click expand

Weather – Things are not improving in Argentina. Hot temperatures are forecast for the next week coupled with little-to-no rain, taking soybean yield potential off by the day. Russian heat, and poor snow cover, is of real concern as we move into February. Northern Hemisphere weather starts to dominate wires.

 

 

Markets – The markets were at the mercy of tariffs on Friday night with wheat, corn and soybeans all moving down while the news was digested, and new trade flows began to be determined. Expect offshore futures to be on the defensive to kick off the week.

Australian day ahead – Locally the influence of tariffs will still be felt. Expect GM canola to be under pressure, barley and feed grains should be supported. Lower AUD helps.

Offshore

President Trump has announced new tariffs of 25pc on all imports from Canada and Mexico (10pc on Canadian energy) and 10pc on imports from China, effective Feb 4, 2025. In response, Canada plans 25pc tariffs on imports from US amounting to C$155 billion, its target including liquor, vegetables, clothing. Mexico and China are preparing countermeasures. Due to start tomorrow, still enough time for things to change? 

Argentine soybean crop condition has been sliding, the good-to-excellent rating down 2pc, to 20pc, according to BAGE. It’s a similar story for corn, down another 2pc over the week to 28pc. 

Stratégie Grains increased its forecast for EU rapeseed 2025/26 production to 19Mt from 18.74Mt.

Ukraine’s grain exports as at January 29 totalled 25.35Mt this season from July 1, according to the Agriculture Ministry. This includes 10.7Mt wheat (up 1.67Mt y/y), 2.06Mt barley (up 600kmt y/y), and 12.17Mt corn (down 300kmt y/y). 

Chinese New Year will wind up mid-week, bringing more attention to the prospect of improved export interest. 

Australia

Western Australian canola bids largely were unchanged to end the week with bids around A$840 for current crop and $795 for new season. Wheat ended the week bid $375 for current season and $388 new, barley ended a strong week bid around $340.   

Through the east of the country canola ended the week bid $760, cereals were steady with wheat $345 and barley $307-$327.  

Domestic feed wheat and barley bids have slowly been working higher over the last week or two, with users working to extend coverage levels with global values slowly moving higher.  

The effect of newly imposed Trump tariffs on Canada, Mexico and China goods will be interesting to watch the effect it has on domestic markets. Expect GM canola to be back with Canadian seed and product exports likely to fall. A case can be made that sentiment will be bullish for Australian cereals with China looking for Australian origin feed grain to replace US corn and wheat.

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