Markets reset across the board for a bunch of separate reasons. Seemingly the speculators took some profit on the short corn, long beans trade they undoubtedly put on post the stocks and acreage report. Corn conditions outlook has something for everyone. The southern Corn Belt will generally see good rainfall while the northern Belt is looking at around 60 percent of normal rainfall. The bulls will grab hold of the fact we are now approaching pollination so risk premium needs to be held. Bears will look at temperature forecasts which are predicted to be around -2°C below the normal daily maxima, which is a good thing for yield. Looking elsewhere in the world, the bulls are certainly focused on China corn crop temperatures, which have been above normal. It could become significant that USDA has China in for 280Mt of production and 23Mt of imports because every tonne China does not produce is a tonne it will have to import. 

Global weather is a mixed bag. Canada conditions are becoming concerning with the 6-10 day forecast removing a little rainfall, particularly in Alberta. Russian/Kazak spring wheat areas have got hotter and drier in the front end but built some relief in the 11-15 day. Europe got way drier in the front end right through the 15-day outlook, particularly in Germany and Poland. The heat also built which will be relevant to all crops but particularly canola. Germany is the EU’s biggest producer. 

The Russian ruble has quietly been collapsing which, coupled with a lower export tax, has increase grower bids to a little over 15,000 rubles per tonne (circa US$165/t) at port, the highest level in over 12 months. This should flush out some more grower selling. July exports should come in around 3.8Mt, the highest July print since 2018. Depending how your balance sheets work you could argue this needs to be closer to 4.5Mt to keep the global demand side happy. 

I honestly have no idea what to believe from Ukraine when it comes to production and planted area. The Ukrainian media are suggesting that canola harvest is underway, and yields are 1.2-1.3mt/ha, well below normal. The same article indicated total production of 3.8Mt.

Australia

Most local markets were slightly firmer yesterday with Port Kembla new crop APW1 multigrade contract bid rising to about the $400/t track level partially following the offshore bounce. 

Canola also firmed and rose through $700/t track. 

Limited selling liquidity remains the theme across most areas with consumers having to resort to buying current crop at full carry to gain coverage. 

This El Niño needs a poncho! Rains in Australia this week were well received and kept the dream alive for the areas needing to link moisture. Further south many are short on urea and are hoping for a dry two weeks to catch up on crop maintenance.