International

Corn and soybeans are in a weather market, with the Argentina and southern Brazil forecast having turned dry again.  This has returned the focus to production cuts and its flow-on impacts to global balances. According to Commodity Weather Group, the dryness has expanded to cover half of the corn and soybean crops in Argentina

Crop consultant Michael Cordonnier cut his Brazilian corn crop estimate by 1 million tonnes (Mt) to 113Mt. He left his projected corn crop estimates for Argentina and Paraguay unchanged. Given the probability of little improvement in drought afflicting southern Brazil, northern Argentina, Paraguay and Uruguay, projections may continue dropping, but Brazilian corn production depends more heavily upon the safrinha crop to be planted after soybeans in many areas. Dr Cordonnier also cut his estimate for the Brazilian soybean crop by 2Mt to 138Mt, and Argentine soybeans by 3Mt to 45Mt.

While the correlation between pre dormancy conditions and final yield in US wheat is pretty low, the market has noted the drop in favourable conditions leading into the depths of winter. While the USDA stops posting their good-to-excellent ratings over winter, the individual states continue to put out numbers; good-to-excellent ratings have been slashed over December, with  Kansas down 29 points, Oklahoma down 28 points and Colorado down 13 points.

Seems the market is comfortable the US will feature in the Iraq tender – now just about when and how much – still nothing official

In the Black Sea wheat market overnight, values were unchanged in early trading, but added $2-4/t in the back end.

Australia

Local markets have kicked off the year wide and thin through the trade, while bids to grower were relatively unchanged across the boards. ASX east coast wheat traded  lower yesterday, and lost $15/t.

Liquidity in Western Australia continues to trade for small volumes on wheat and barley. Canola values have been very sluggish relative to offshore moves on the MATIF exchange.

Weather through Victoria’s Western Districts is slowing the wheat harvest. Showers of rain overnight and cool mild temperatures are sweeping into Victoria’s Western Districts, slowing harvest.

Overall, harvest across Australia is coming to an end. A couple of barley vessels that were expected to load in December have rolled into January, which will leave us with around a 930,000t shipped in December. January has around 700,000t of barley on the stem so far.

Local road freight has tightened, and rates continue to hike higher. Operations at some local depot sites have been hit by COVID causing shutdowns or limiting staff, therefore putting more strain on the flow of grain from sites to up-country homes, or into port for export commitments.