European wheat closed one per cent lower, rapeseed slightly firmer.
- Chicago, Kansas and Minneapolis wheat markets were closed;
- MATIF wheat December contract down €2.25/t to €242.25/t;
- Corn, soybeans and Winnipeg canola markets were closed;
- MATIF rapeseed November contract up €2/t to €573.75/t;
- US dollar index up 0.1 to 92.2;
- AUD unchanged at US$0.744;
- CAD firmer at $1.253;
- EUR weaker at $1.187;
- ASX wheat September contract unchanged at $340.50/t;
- ASX wheat January 2022 up $6/t to $345/t.
Today’s report is truncated given the US Labor Day holiday Monday. Matif wheat fell by €2.25/mt to settle at €242.25/mt. Matif canola rallied €2.00/mt to settle at €573.75/mt. The Dow Jones index eased 74 points to settle at 35369 points. Crude slid by 60usc to settle at 68.20USD/bbl
The odds have firmed that the RBA will re-adjust their plans to wind back their bond purchase program given the extent of the east coast lockdown. The range of estimates in the market suggest the economy contracted by between 1 and 4 per cent. The RBA was confident that the vaccine roll out would limit the need to extensive lockdowns but, however, this has not been the case. So now, the market will remain sensitive to the plan forward rather than the extent of the growth pull back. Lowe is on record saying they will remain flexible when it comes to their weekly purchase program and the narrative suggests they will err on the side of liquidity.
ABARES released their September crop estimate overnight on Tuesday, 7 September 2021. Strong numbers in which takes into account a positive outlook for spring and is a big jump up from their last report in June. Certainty possible but the next coming months are crucial and need the outlook to convert to actuals. USDA WASDE is out on Friday this week, 10th of Sep. The USDA was 30 million tonnes (Mt) in their last report for Australian wheat production. We would expect they adopt this ABAREs number this week in their September report.
Wheat: 32.6Mt vs June @ 27.8Mt
Barley: 12.44Mt vs June @ 10.9Mt
Canola: 5.03Mt vs June @ 3.81Mt
Markets were slow going by the day end, wheat new crop values were off $3-5/t across the boards while barley bids pulled back $3-5/t but offer side remained unchanged therefore left the day finished out very wide markets across the east coast. Weakness in markets came off the back of good rainfall through large parts of NSW and Victoria along with a stronger AUD at .7438 across most of the trading day.
Source: Lachstock Consulting
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