Poor weekly export loadings for corn and wheat out of the USA set the tone last night. Without any new news to feed the futures market prices were generally softer across the board for the current crop. Soybeans were the only real exception but a 1.25c/bu (AUD$0.65/t) increase is far from a rally. With the US/China trade negotiations the only thing driving the soybean price it too may struggle to stay on the right side of the ledger. China did order 120kt of US soybeans late last week, ordering and executing are two things though.
With a USDA report due out on Friday we’ll probably see nothing more than positioning and technical trade ahead of the report. The winter weather in the US is creating a few spots where better basis is offered but generally anywhere there is a header rolling in corn or soybeans basis continues to weaken.
In vegetable oils we see Asian markets higher as speculators appear happy to get long for early next year. The strength rolled through to both the ICE canola market and the Paris rapeseed market. Perhaps the punters are backing an outcome in the US/China deal by Q1 2020, time will tell.
Russian wheat has priced itself out of much of the Asian market. Feed wheat out of the Black Sea if offered at about US$202 per tonne. Ocean freight to the Asian market is roughly US$32.00, so US$234 FOB Asian port. Feed wheat from WA is about US$211 with a freight rate closer to US$17, so roughly US$228. The WA seller may find better value for their SFW1 into eastern Australian consumers though.