US grain futures were a little more subdued in last night’s session. Although generally a sea of red, wheat, corn, and soybeans all lower, wheat and corn were not as hard hit as soybeans. In fact, the sharply weaker AUD today should easily counter the AUD$3.21 move lower in Chicago SRWW futures and in theory turn it into an AUD$3.00 gain as the move is worth roughly $6.23 in currency alone.
The US FED increased their benchmark rate by 0.75% yesterday and the commentary basically implied there is more to come. This takes their short-term rate to 4%, the highest rate in 15 years. This compares to the official RBA rate of 2.6% here in Australia. RBA Gov Lowe also not ruling out further rate hikes here if inflation isn’t contained.
I’m still struggling with this supply driven inflation being fixed by lifting interest rates. I mean reducing the ability to buy what is available by decreasing affordability isn’t really fixing a supply problem is it, the price will still be high as it’s scarce. Just because no one can afford a widget doesn’t mean the widget is cheap, it just means that the only people left to buy them are the rich, be that consumer located here, the USA, EU, Africa is irrelevant, if they are selling all they can produce to anyone the price will not fall. Decreasing affordability through increasing borrowing rates or current debt serviceability is just slowing the purchasing power down to meet the inability to supply. That’s crazy economics, that just stalls an economy, it doesn’t discourage price inflation just growth. If we can’t import the widgets at the volume to meet demand, should we not be looking at manufacturing more widgets locally, not kill demand by crippling a nation. Sorry, that’s not very grain related but it grinds my gears.

Canadian durum exports are the slowest they’ve been in 10 years, raising the question was the European crop as bad as reported.