It’s all about the Aussie dollar today. Overnight weakness against the USD saw the AUD fall of 2.13%, closing the session closer to 69c than 71c where it spent the last half of the week. The decline in straight up Aussie dollars per tonne is worth between AUD$10 and AUD$20 depending on the grain. Canola and more highly priced grains standing to gain the greatest. The decline in the AUD did coincide with a decline in US wheat futures as it so often does. The conversion still equates to some potential upside in local wheat values here on Monday.
The strength in the USD came from labour market data, the US economy is showing surprising strength… apparently, adding 516k jobs in January. This is a record number for January and well above the market estimate of just +185k. The US unemployment rate is now the lowest it has been since 1969. The US manufacturing index also surprised many analysts, continuing to improve at a better rate than expected.
One can’t help but think that this US data will be used to confirm another interest rate rise in March. With the housing market continuing to contract here in Australia and the impact that has on the local market. One could conclude that the USD may continue to increase as the AUD declines. This isn’t a given though, reports out of China continues to suggest a strong recovery is likely now that COVID restrictions are removed, possibly bullish for the AUD.

Global grain prices in USD terms were generally lower. The fall in the AUD converting some grains to a positive close in AUD terms but not the case for all. Durum wheat offered out of France was sharply lower, the fall in the AUD unable to counter the decline in values out of Port La Nouvelle and potentially indicating that local bids, if we had any, may well fall a little further on Monday.
Bird flu continues to be a demand concern, cases in N.America continue to climb and there are now reports of the disease in Bolivia and Ecuador.