Grain markets bounced back overnight in the short session ahead of the Independence Day holiday in the US.
- Chicago wheat September contract up 10.6 cents per bushel to 514c;
- Kansas wheat September contract up 11.2c to 443.6c,
- Minneapolis wheat July contract up 10.4c to 540c,
- MATIF wheat September contract up €1.50 per tonne to €178.50;
- Corn September contract up 17.6c to 436.6c;
- Soybeans August contract up 10c to 889.6c;
- Winnipeg canola November contract down C$0.80/t to $450.20;
- MATIF rapeseed August contract up €3 to €364.25;
- West Texas crude oil up US$1 per barrel to $57.30;
- Dow Jones up 179 points to 26,966;
- AUD up slightly at US$0.703c;
- CAD weaker at $1.305;
- EUR weaker at $1.128.
US and China
Amid the ongoing trade war truce, news headlines are reporting unofficially that the Chinese Government may be making “goodwill” purchases of US ag commodities, but flash sales are yet to be seen. At the same time, China’s State Council has announced it intends to offer subsidies to large-scale pork producers and reduce the number of smaller farms amid their ongoing attempts to control African Swine Fever. Many continue to estimate that impacts from the disease could be over twice what has been officially announced, contributing to ongoing questions about its impact on China’s feedgrain demand.
Northern wheat progress
Harvest is picking up pace in southern France, with reports of big yields coming in, and no impacts reported in southern areas from the recent heatwave thanks to the maturity of the crop at the time. There are still questions about the potential for adverse impact in more northerly areas where wheat crops were less mature, and corn crops are reported to be showing some stress. Similarly, the US wheat harvest has been a stop-start affair through the southern plains, with a mix of good weather, showers and days of high humidity interrupting fieldwork. Yield continues to be very good, and there has been little change to earlier idea about better-than-expected grain quality, which includes some low protein, but above more pessimistic earlier ideas. Results vary widely by area, but the underlying theme about crop quality has remained positive.
Showers have started in Western Australia already, with the latest models still forecasting for 15-25 millimetres or more across the entire wheatbelt into the weekend. A storm cell is still expected to hold to the south once it has crossed the Great Australian Bight, but there has been some improvement for the chance of rain in southern and central New South Wales, where 10-15mm would hold up crops nicely. However, very little rain is in the forecast for northern NSW and southern Queensland.
Source: Lachstock Consulting