Markets rallied.

• Chicago wheat July contract up US4c/bu to 512;
• Kansas wheat July contract up 7c to 457.75c;
• Minneapolis wheat July contract up 3.75c to 520.25c;
• MATIF wheat September contract up  €0.50 to €185.25/t;
• Corn July contract down 0.25c/bu to 324¢;
• Soybeans July contract up 7¢/bu to 857.5¢;
• Winnipeg canola July contract up $C1.10 to $460.90/t;
• MATIF rapeseed August contract up €1.25/t to €374.25/t;
• Brent crude August contract up US$0.22 per barrel to $39.79;
• Dow Jones index up 527 to 26270;
• AUD weaker at $0.6901;
• CAD weaker at $1.3511;
• EUR firmer at $1.1221.

Markets

In the wheat pits Chicago settled up 4 usc/bu closing at 512usc/bu, Kansas was 7 usc/bu higher to settle at 457.75usc/bu, while Minni rallied 3.75 usc/bu to go out at 520.25usc/bu. Corn fell -0.25 usc/bu to go out at 324usc/bu while Beans were up 7 usc/bu to settle at 857.5usc/bu WCE Canola rallied 1.1 CAD/mt closing at 460.9CAD/mt with Matif Canola finishing higher by 1.25 Eur/mt.

Weather twists and turns

Global weather is still providing the odd twist and turn into the end of the northern hemisphere winter crop year. Conversations to date tended to be all about total production. Dominant exporters such as Russia, the Ukraine and the EU have all had a crazy weather year but, in the case of the Black Sea region at least, have managed to find some late season rainfall that has the potential to save overall output. Increasingly however, the market is talking about quality. France and the Ukraine are good examples. The French wheat crop is rated well under last season’s crop and, like the 3 bears, they have had a season of extremes. Too wet, too dry and now raining. Ukraine has extremely dry areas and some extremely wet, so wet that quality is going to certainly be impacted. This along with the subsequent total production downgrade that has the potential to trim Ukrainian exports by 5 million tonnes. Before we get bullish, the Russian crop, both winter and spring has arguably been saved by late season rainfall. Additionally, this is a year with plenty of feed grain alternatives, the reduction in ethanol demand has increased the corn availability so there is ample supply competition should the wider wheat crop end up being of low quality.

Sorghum under the radar

From a distance you would be forgiven for forgetting we are currently harvesting a Queensland sorghum crop. In what has been two years of relocating from the haves to the have nots the local sorghum crop has for a long time, been predicted to be small. This has taken it off many traders and end users’ radars as the ability and price incentive to switch from a heavy barley ration back to a more traditional ration that includes sorghum. This makes price discovery exceptionally difficult. A crop less than 400,000t nationally probably doesn’t have much to give on the export front and, even if we did, would China ignore what is going on in barley and buy Australian product. This now becomes a question for next season and while there is a lot of weather to transpire between now and then current price spreads encourage a return to a more normalized planted area. China is the dominant importer of Australian sorghum and their appetite will dictate price.

Currency heat cuts Australian bids

Aussie markets felt the heat of the AUD yesterday falling away by $5-6 across the board on new and old crop, we had ASX January east coast contracts settle at $294/t for wheat where small liquidity was traded in that range and barley finished the day $232/t. Over in the west, barley bids remained relatively unchanged over in the past 1-2 trading days after falling away on the back of the China tariff news. It now feels like the market has found a level for now with feed barley grower bids holding in the range of $240-245/t FIS for 20/21 season. We are now set for a dryer 8-day outlook through the Australian cropping belt as planting is all but done. We have really hit winter quickly with some cold morning starts through the south recording below 5° C for the next couple of mornings.

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