The day ahead

Weather – Rain on the east coast is now behind us (hopefully) with totals coming in below the more extreme forecasts. Having said that, over the past week, some areas saw falls greater than 100mm – so now it’s all about the impact. Nothing market moving globally, more of the same.

Markets – It was a bumpy week with futures and cash markets diverging. Russian cash was firmer over the week as the grind into the export quotas begins. From a futures perspective, Matif also outperformed its North American cousins. But, it was all about the AUD, finally breaking under the magical 0.6400 mark, printing its lowest level since Aug. 

The Australian dollar eased below US64 cents. Source: Bloomberg in Lachstock Daily Market Wire.

Historically, the AUD does not hang out below 0.6400 for long so it will be interesting to see what the market thinks about this pull back.

Australian day ahead – Currency alone should keep the cash markets bid. From a wheat perspective, Russian FOB firming will also give the trade some confidence, particularly those with a tight balance sheet for Q1 2025.

Offshore

French wheat crop was rated at 86pc good to excellent, down 1pc for the week and slightly behind the 5-yr average of 88pc. Barley was rated at 83pc vs the 5-yr average of 88.6pc. 

No more GASC. The role of importing wheat to Egypt now sits with the Agency for Sustainable Development according to a report in Reuters.

Russian wheat export tax is now at US$49.28/t, a massive jump as the govt tries to slow exports. The weak RUB contributing to the increase in the calculation.

The December WASDE will be out on Tuesday this week – some of the focus will be on both corn exports and ethanol production, both of which should go up.