Grain markets closed sharply higher on short covering and technical trading prior to Monday’s public holiday in the US.

• Chicago wheat up 6 cents per bushel,
• Kansas wheat up 9c,
• Minneapolis wheat up 7c,
• MATIF wheat up €1 per tonne,
• Corn up 6c,
• Soybeans up 13c,
• MATIF rapeseed down €1/t,
• Winnipeg canola up C$4/t,
• Dow Jones up 163 points,
• West Texas crude oil steady at US$52.30 per barrel.
• AUD higher at $0.719c,
• CAD eased to $1.328,
• EUR steady at $1.139.

Wheat

With a suspension of USDA export sales information because of the US Government shutdown, the market has no way of confirming or refuting rumoured purchases of US Hard Red Winter wheat by China, North Africa and Latin.  US wheat was priced competitively, or close to it, in these markets, but the question is how much and when trade will happen.  Confirmation of this business is required to justify a continued rally in US futures. After the bounce overnight, price spreads have started to widen a little, and Russian markets have continued to increase gradually. Argentina’s wheat harvest is nearly over, with the Buenos Aires Grain Exchange pushing up its crop estimate to 19 million tonnes (Mt), 500,000t below the most recent USDA estimate.

Australia

Australian wheat continues to play in its own world, but we don’t need to price any elastic demand, given the domestic situation and east-coast transhipment needs.  Domestic east-coast markets have held relatively steady through the last couple of days, and with no parties keen to pay up, the Victorian post-harvest push has gradually eased.  The Bureau of Meteorolgy yesterday updated its climate outlook, which predicts more hot and dry weather through late summer and early autumn. This has raised some early concerns about tough winter-crop planting conditions.  Soil moisture levels improved sharply in parts of New South Wales and Victoria after rain late last year, but we would need to see some in-season rains to connect through to the subsoil.

Source: Lachstock Consulting