With the RBA holding the official rate at 4.1% and not following the US FED by increasing rates, it has allowed for some downside in the AUD against the greenback. Overnight the AUD fell against the US dollar by 1.55%. The AUD was also weaker against all the majors. This has turned potential downside in local canola prices here today to potential upside. The weaker dollar more than countering the lower futures at Paris. The net plausible gain, given a flat basis, is somewhere around AUD$16.00 in the new crop. The move in the AUD should go a long way to countering any weakness being exerted over the physical market by Chicago wheat futures too. There won’t need to be much of an improvement in basis to cover the possible $7.50 loss when converting the move to AUD at today’s exchange rate, the weaker AUD countering by about AUD$5.61/t.
A weaker economic outlook for much as Asia will have an impact on demand for Australian goods going forward, potentially capping further increases in local rates and also potentially putting more downside pressure on the AUD, especially if US rates take another 25 point gain next month.

Russian wheat harvest passes the 31% mark, in total 37.4mt of wheat has been harvested. Wet conditions should start to withdraw later this week.