Lower across the board for grains, with Winnipeg Canola close to unchanged.

CBOT Wheat was down -5.75c to 401c, Kansas wheat down -5c to 411.75c, Corn down -2.5c to 364.75c, soybeans up 1.25c to 1049c, Winnipeg canola up 0.59$C to 529.3$C, and Matif canola down -2€ to 412€. The Dow Jones up 297.84 to 19549.62 , Crude Oil down -1.05c to 49.88c, AUD up to 0.7477c, CAD down to 1.323c, (AUDCAD 0.989) and the was EUR up to 1.075c (AUDEUR 0.6948).

Market reasonably quiet ahead of the USDA report.

Wheat lost ground as the reality of aggressive Argy wheat sales increases the challenge of finding US wheat demand for HRW and SRW. Argy wheat is only 30% harvested and quality is still unclear, but aggressive export selling suggests that there is no issue.

What this means for Australian pricing is increased competition into export destinations, which will slow demand, increase carryout and pressure prices going forward. From a timing point of view, we can only see wheat competition from Argy for the next 60-90 days. Which could help Aussie/US demand in Q2, Q3 of next year. Indian Wheat planting is progressing better than last year, up 14% from the same time last year.

The implication of a succesful Indian harvest would see reduced import demand, which shuts the door on Australian exports and leaves us relying on traditional Asian demand to reduce carryout.

USDA could reduce US wheat exports due to lower inspections which could add further downside pressure to futures. Production surprises are unlikely as large Arg/Aussie crops are already factored in. Fresh export sales and ongoing concern for Argentina forecast, saw beans close higher. Corn had positive ethanol production figures and also potential upside with Argy forecast, but long liquidation and good Brazilian conditions restricted a higher close.

Canola experienced choppy trade, with a stronger Canadian dollar. Palm oil closed lower after a very impress run of late.

Source: Lachstock Consulting