Futures mostly settled lower on Friday.
- Chicago wheat December contract down US6.75c/bu to 732.5c/bu;
- Kansas wheat December contract down 4.25c/bu to 724;
- Minneapolis wheat December contract up 6.25c/bu to 917.75c;
- MATIF wheat December contract down €0.75/t to €246.75/t;
- Corn December contract was up 3c/bu to 553.75c;
- Soybeans November contract down 3c/bu to 1323.25c;
- Winnipeg canola November contract was down C$1.40 to $912.70;
- MATIF rapeseed November contract down €5.25/t to €571/t;
- US dollar index down 0.3 to 92.7;
- AUD firmer at US$0.731;
- CAD firmer at $1.262;
- EUR firmer at $1.180;
- ASX wheat September contract up A$1/t to $361/t;
- ASX wheat January 2022 up $5.70/t to $349/t.
The wheat market has a lot on its plate. Most pressing will be the release of StatsCan estimates tonight which will continue the narrative of lower production in another major exporter.
SovEcon consultancy lowered its forecast of Russian wheat exports 3.2 million tonnes (Mt) to 33.9Mt.
German grain production was forecast 42.4Mt, 4.7 per cent below the 5-year average.
The Buenos Aires Grain Exchange maintained their 19Mt wheat estimate.
Add to this increasing concern about global quality, led by French wheat, and we still don’t have a clear understanding of what fair value should be.
One thing that is clear, however, is demand. Demand is strong and, in many of the main destinations, it is still hand-to-mouth. The market setup is volatile.
Rumours are circulating about China wheat demand. In addition Australian wheat already in demand by China, for shipment December onwards, we can expect to add some US Soft Red Winter wheat.
New season picked up towards the back end of the week, wheat finishing on Friday up $3-4/t. Track APWMG in Victoria was around $350/t. Barley bids were $1-2/t firmer across the board new crop. Track values ended the week at $280/t Vic and $310/t Kwinana FIS.
Old crop continued to leak out to fulfil the nearby demand.
Canola new crop again pushed higher, new highs in WA pushing values to around $930t FIS and east coast quoting $900/t track.
Reports emerged of new season canola export business being done. Australian prices are very competitive into Europe and Japan. The shrinking Canadian crop is adding further pressure to the very tight global vegetable oils balance sheet.
Transport will be affected today in Queensland as truck drivers rally over COVID-19 regulations.
BOM is predicting an increase in weather activity, its 8-day forecasting has 10-25mm rain falling across a large part of Victoria and into southern and central NSW.
SA and the Victorian Mallee are set to record some higher temps towards the back end of the week when 30 degrees maximums will test Mallee crops.
Source: Lachstock Consulting