Kansas Hard Red Winter wheat futures firmed 2pc. Canola and corn weakened.

International

In the wheat pits Chicago settled up 9.25 usc/bu closing at 726.25usc/bu, Kansas was 14 usc/bu higher to settle at 723usc/bu, while Minni rallied 13 usc/bu to go out at 912.5usc/bu. Corn fell -1.5 usc/bu to go out at 524usc/bu while beans were up 8.75 usc/bu to settle at 1292usc/bu WCE canola softened -6.3 CAD/mt closing at 866.25CAD/mt with Matif canola finishing lower by -2.5 Eur/mt. In outside markets the Dow Jones fell -74.73 points, crude was down -0.62 bbl.

Wheat hasn’t solved any problems yet. Actually, it has added a few. Spring wheat yields in Russia have been below expectations, forcing many to drop their all wheat estimates to closer to 70 million tonnes (Mt). Ukraine is filling the void for the moment, providing liquidity to the export bids. This becomes more important because the new Russia tax system, which is up another US$7/t, providing uncertainty in deferred offers.

The timeline for resumption of exports out of the US Gulf is a moving target but repairers seem to be making headway on getting power back up. Then the hard work begins. It’s hard to know what corn market operators think about all this.  In the wheat market, the balance sheet is still painfully tight and in the soybeans market, there’s a smell about them of China-demand-is-a-comin.’ Corn has the risk that the USDA feeds a few more acres into the balance sheet in this week’s WASDE. Crop forecaster Informa did trim overall US yield from 176.5bu/ac to 175.4bu/ac.

These are interesting times for the US. Many schools are reopening. The infection rates will be watched closely given the economic outlook largely based off the country “re-opening”. While Australia is still locked down we haven’t seen the impact flow into our economic data as yet. This has specific implications for the Aussie dollar which has been retesting the upper end of the recent range.

US futures markets are closed during the night session due to the Labor Day long weekend, and will reopen on the Monday night session on Tuesday Aussie time.

Australia

New crop wheat markets finished the week down A$7-8/t. While markets were relatively flat at the start of the week they went to ground as the week ended.

Grower liquidity was mixed with some east coast selling hitting the boards ahead of the rainfall event. Barley track markets were $1-2/t softer last week while the Victorian delivered bids held up to be relatively unchanged. Canola drifted lower. WA FIS bids were off $18-20/t over the course of the week while on Friday they found some ground and were back up $5-6/t.

Old crop markets continue to grind away. Values on wheat and barley are relatively unchanged as it is the same old story of buyers stepping in for coverage for the LH September-October periods.

Lentils have been a exciting market for growers still holding onto some old crop length as bids have skyrocketed into the $1150s per tonne as demand for exports has spiked. Bids were pulled later in the week on issues around logistics and container availability.

The rain event across the weekend was fantastic for large portion of growers along the east coast and came in good time with most areas in SNSW receiving falls of greater than 20mm. While Victoria was much the same with some great totals across the Wimmera and Mallee upwards to 20mm in areas where it was much needed for them to stay in the game. Parts of SA missed out, receiving only scattered showers, however the SA Mallee and Murray lands were the ones that needed the rain and got their 10-15mm.

Source: Lachstock Consulting