Some nice moves in US wheat futures overnight could basically be countered by a 1.69% rally in the Aussie dollar against the greenback today, not exactly what we were hoping for.
The US markets were generally about weather and squaring up prior to Friday night’s USDA WASDE report. Soybeans found resistance towards the close, shedding most of the gains made earlier in the session. The oilseed market saw some profit taking across the board. Chicago soybeans and Paris rapeseed closing lower while Winnipeg canola managed to close in the green. The AUD / CAD conversion alone is worth a discount of AUD$7.14 though, quickly countering the potential AUD$1.55 upside in futures.
Corn was a little higher, most punters tend to agree that the chance of the USDA numbers reflecting the decline in this week’s crop rating is minimal. Potentially rendering the data obsolete to some extent before the report is even released. The same could be said for the spring wheat data. Corn production and ending stocks for Ukraine will be a number to closely watched though. Reports of drastically lower yield potential and smaller acres there and in parts of Europe should see world carry over lower.
There is a large amount of speculation around this WASDE report, markets may behave unpredictably on Friday US time. There could be a little buy the rumour / sell the fact trade and we may also see the Algo traders jump in unexpectedly. All this speculation could lead to an interesting start to next week. Sorghum values CiF China were higher, FOB US was also higher, Argie values were flat but again the AUD will take care of any potential rally here due to better export values. We shouldn’t see prices fall but the potential $5.00 rally on the back of better world values looks unlikely. There is the speculation that US corn yields will be cut, a greater than expected fall there will indeed fuel world sorghum prices next week. Fingers crossed.