Wheat lost ground and oilseeds gained. US dollar weakened again.

• Chicago wheat July contract down US7.25c/bu to 508;
• Kansas wheat July contract down 11.75c to 450.75c;
• Minneapolis wheat July contract down 4.75c to 516.5c;
• MATIF wheat September contract down €2.25 to €184.25/t;
• Corn July contract up 1c/bu to 324.25¢;
• Soybeans July contract up 10¢/bu to 850.5¢;
• Winnipeg canola July contract up $C2.70 to $459.80/t;
• MATIF rapeseed August contract up €2/t to €373/t;
• Brent crude August contract up US$1.25 per barrel to $39.57;
• Dow Jones index up 268 to 25743;
• AUD firmer at $0.6955;
• CAD firmer at $1.3495;
• EUR firmer at $1.1190.

Markets

In the wheat pits Chicago settled down -7.25 usc/bu closing at 508usc/bu, Kansas was -11.75 usc/bu lower to settle at 450.75usc/bu, while Minni softened -4.75 usc/bu to go out at 516.5usc/bu. Corn gained 1 usc/bu to go out at 324.25usc/bu while Beans were up 10 usc/bu to settle at 850.5usc/bu WCE Canola rallied 2.7 CAD/mt closing at 459.8CAD/mt with Matif Canola finishing higher by 2 Eur/mt. In outside markets the Dow Jones gained 91.91 points, Crude was up 1.37 bbl the Aussie was 0.0099 points higher to settle at 0.6896, the CAD softened -0.0053 while the EUR gained 0.0033.

The long awaited GASC tender took place yesterday with Egypt buying 2 cargoes of Ukraine wheat for July shipment. The traded FOB level of US$210/t was lower than expected, with Russian values $3-11/t higher. French was somewhere in the middle while the US further confirmed its premium to the global wholesale sellers of the Black Sea region. The lower print had both Matif and Chicago on the back foot with selling increasing into the close. Timing is everything.  The cheaper global market as US harvest gains momentum did nothing to support domestic US values. Conjecture over Russian production will be a significant driver in global markets but, with an independent market commentator increasing their Ukrainian wheat crop today the bias is for an increase in Black Sea region production. This will have significant impact to Asian relative value as Australia grapples with the firmer AUD.

The US protests have, if anything, worsened. Reports of 5 police offers being shot was the clearest example of just how out of control things are getting. Despite President pushing a harder line and curfews being imposed in dozens of cities the looting continued. The most visual examples were the events on 5th Avenue in Manhattan and the construction of an additional security fence around the White House. The timing of George Floyd’s death has certainly been a catalyst in the escalation of unrest. Record unemployment and widespread anger over lockdown measures have fuelled the wider response. Confusing to me has been the financial market reaction to these events. The Dow posted its third straight higher session while the USD index hit a 2.5 month low, seemingly divergent reactions. Overnight wires attributed the downward dollar move to global concern over US stability and growth while equity commentators focussed on the re-opening of the US economy post-COVID. Whatever the reason the AUD rally is having a dramatic effect on local grain prices.

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Australia

Locally more showers of rain pushed through South Australian Eyre Peninsula and across the rest of the state with some areas recording upwards of 7mm while others saw a widespread 1mm. Victoria and southern NSW have also recorded rainfall up to 10mm in the past 48hrs. Markets for new crop wheat and barley yesterday were yet again softer by $3-4/t bid side in the trade while offers were relatively unchanged. Canola again was softer bid side with Victorian track finishing around the high $580s per tonne range for 20/21 season non-GM canola. LSC saw March-April canola export pace up vs last year keeping old crop prices supported and keeping the domestic balance sheet tight. LSC sees the 2019/20 carryout at close to 120,000mt while the 10-year average is about 420,000mt.

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