Wheat markets initially surged after Ukraine’s Nova Kakhovka dam was damaged in a blast, causing significant flooding along the Dnipro River. The dam provides water for the cooling towers of the Zaporizhzhia nuclear plant and water for areas south of the dam, including Crimea. Ukraine has accused Russia, while Russia said it was caused by Ukrainian troops. This came after a part of an ammonia pipeline, that Russia sees as one of the key issues in talks on the Black Sea corridor was damaged by an explosion. It is not clear at this stage what will be the implications of this escalation. 

Black Sea market analyst SovEcon estimated that Russian wheat exports may reach 45.7Mt in 2023-24, surpassing this year’s record by 3pc. The projection was revised upwards due to higher crop estimates, a low likelihood of new Russian government intervention purchases, and the launch of operations at a new deep-water terminal. 

Crop consultant Michael Cordonnier has lowered his US corn yield by 1 bushel per acre (bu/ac) to 179 bu/ac, citing a drier bias across the Corn Belt and now forecasts corn production at 14.94 billion bushels. Dr Cordonnier left his soybean yield and production forecasts at 52 bu/ac and 4.53 billion bu., respectively, noting dry conditions in early June do not necessarily translate to lower yields if weather turns more favourable later in the growing season.
US private exporters reported sales of 165,000 tonnes of soybeans for delivery to Spain during the 2022-23 marketing year. 

European Commission data show that EU soft-wheat exports as of June 4 are at 28.9Mt, compared with 25.9Mt last year, barley at 6Mt (6.8Mt previous year) and corn imports at 24.6Mt (15.3Mt).
Japan’s MAFF is in the market to buy 86,922 tonnes of food-quality wheat from Canada and Australia in its regular tender that will close on Thursday

Local markets again were steady yesterday, with wheat and barley values largely unchanged to a few bucks softer on current crop but hard to strike a bid or offer along the East Coast. Current crop ASW1 in WA traded $5/t lower. Current crop canola kicked and saw liquidity as sellers let some more go. Eastern Australian track was bid around $635-640/t levels and a touch higher for good sites. 

The Bureau of Meteorology, now reporting El Niño alert, indicating a 70pc chance of El Niño forming this year, in its Climate Driver Update yesterday. Central and eastern Pacific sea surface temperatures have warmed to El Niño thresholds but the atmosphere has not yet responded for an event to be declared. All models surveyed by the Bureau are forecasting the likelihood of further warming and that these temps will remain above El Niño thresholds at least into the southern hemisphere spring. 

The Reserve Bank lifted interest rates for the 12th time in just over a year, with the 25 basis point increase bringing the cash rate to 4.1pc, its highest level in 11 years.