Tuesday’s US markets were driven higher by strong corn price sentiment.

Different day, same fundamentals, different result. Markets were all fully firm overnight as the conjecture around Brazilian corn production swung back to the buyer. Corn led the charge closing up 18usc/bu while Chicago wheat added 8.75usc/bu. With wheat at 726.75usc/bu and corn at 696.75usc/bu the feeding calcs would be certainly leaning towards increased wheat feeding (basis aside). Soybeans managed to add 14.25usc/bu to settle at 1538.25, meal increased USD $6.40/st and bean oil snuck up 0.52usc/lbs. Matif wheat firmed EUR$4.75/mt to close at EUR$220.5/mt. Outside markets saw crude up $1.20/bbl and the Aussie closed at 0.7703 offshore.

Dr Cordonnier, a well-known analyst who specializes in South America, pegged the Brazilian corn at 100 million tonnes (Mt) (USDA 109Mt) but flagged the risk of further downside due to dryness. He even mentioned 90Mt as a potential.
The wires are full of the logical next “what if” post further Brazilian corn production cuts. How do global feed gain balance sheets get fixed – how much corn demand swings to wheat?

Russian wheat exports are up 13pc so far this season according to the Federal Center of Quality & Safety Assurance for Grain and Grain Products.

The May WASDE report is setting up for an old-fashioned game of chicken. How much of the much speculated Brazilian corn cuts will the USDA bake into this report. The US has already shipped 40Mt of corn, with 4 months to run, and the current full-year estimate is 45Mt. It suggests some adjustments are needed. It’s logical to assume that 1.5bbu carryout seems overdone based on these anticipated adjustments.
CONAB (Brazil’s National Food Supply Company) will follow the USDA report and will likely either validate or dispute the American numbers.

Australia

New season wheat and barley markets were a buck or 2 softer on the bid side yesterday across the boards. Yet again canola is the performer in this new crop market as we saw bids up again by $5/t with west coast track values $740/t and WA FIS $775/t range, which is peaking to the highs we have seen thus far.

Current crop wheat remained steady across the trading day with still reasonable liquidity being traded in the market across WA.

Barley markets along the east coast continue to remain wide on the bid offer spread for May-July slots. With a late break in SA and parts of Victoria do we now start to see more stocks being held back on farm for livestock programs through the mixed enterprises?

Sorghum harvest through the northern parts of Australia continues to ramp along, but we still seeing downgraded sorghum hit the market and being rejected from port for export programs with SORG 2 values trading around that $30/t discount due to shot and sprung as a result of mice infestations.

South Australian Viterra network released their monthly receivals report yesterday and figures showed a total of 6,664mt received into the system across the 3 regions in the past month coming off farm back into the network as the bulk export program continues to power along.

Source: Lachstock Consulting