The Aussie dollar was generally lower against the major currencies last night, the weakness should go a long way to countering the slight shift lower in ICE canola futures.
In the US wheat, corn and soybean futures were flat to firmer. The softer US dollar played a big part in the grain prices last night and the market is becoming range bound as harvest is ramping up or coming to a close in many northern hemisphere countries.
There was also support for contracts like MGEX spring wheat from the bargain hunters after three month lows were set earlier in the week. Technical short covering by the funds in SRW futures also aided liquidity.
The international market is looking towards production problems in Australia and Argentina to drive the market in the short term. The USDA still has 2017-18 Aussie wheat exports pencilled in at 18mt, most of the punters now see this at 14mt or lower. This will help world ending stocks cope with the larger Russian harvest and should stabilise if not support values in the short to midterm.
China is expected to roll out E10 fuel by 2020, the increased demand for ethanol should make short work of their corn stock pile and is expected to increase corn demand in China by as much as 45mt. With corn in the north of China being used for fuel it may once again see an increase in feed grain demand from the south. There is speculation a 20mt feed gap may be created and filled with imports.