We are keeping an eye on the macro markets on the China topic after comments in the news that the US and China will be meeting on August 15th to “review” the trade deal and, implicitly, China’s failure to meet obligations there thus far.

Market chatter has been rehashing the same old stories from recent days; Black Sea crops may not be as bad as some hoped, Australia’s most likely getting rain and demand is generally lacklustre globally.  Markets tend to need continued excitement to hold up, and there hasn’t been much of that to be found recently.  Wheat is available, corn and bean crops are looking large, and China has not been seen around like they were in previously weeks.  Even FOB buyers in the Black Sea region are reported to be harder to come by which is a blessing to some of the shorts.  On the upside, Egypt buying agency GASC has sensed blood and put out another tender, but that’s purely a matter of timing. It was coming again eventually anyway.  Markets later in the week should start looking towards the August crop reports, due out next Wednesday August 12.

The cold snap overnight in parts of SA and western Vic has seen frosts and temps a couple of degrees below zero.  No significant damage reported yet though as frosts were thought to be mostly localized and the impact light.  Forecasts continue to call for some solid moisture into cropping areas, with most of the Mallee and SA now seeing forecasts > 25 mm.  Maps have also firmed for weekend storms into WA where it’s looking like good coverage for the wheat belt.  Some have been asking “what if” we do not see the rains, but with each run of the weather maps the coverage and confidence seems to be increasing. Markets are becoming more comfortable.  Wheat and barley were both down $5/t or so yesterday, although ASX new crop picked up a bit later in the day. Values to start today are looking weaker.

Australia

The week has kicked off with a positive start after rain in Western Australia’s Albany zone pushed over 30 millimetres in spots.  Scattered showers fell across other WA port zones, and there were forecasts for more to come later in the week.  On the east coast, we’ve seen snow in parts of western Victoria. It’s amazing how quickly weather can change!  Weather forecasts have really filled in on the maps for this week, with 30-plus mm now predicted for almost all of New South Wales, and 15-20mm for the Mallee and Riverina.  Cash markets started the week lower. Wheat, cash and ASX, was off $3-4/t. Barley was also a fraction softer on the new-crop, with the strong AUD and weather forecasts all contributing to easing values.