US weekly wheat export sales for the week ending Dec7th will be released overnight. According to the pre report trade estimates, which vary between 1.2mt and 1.6mt, if correct, would be the largest weekly sales number for wheat since 2013, possibly earlier. Taking this into account, obviously we see US wheat futures fall substantially in overnight trade. Taking back much, or more, of the previous sessions gain, which in turn took back much of the large move lower on Monday’s session. Thus the net result so far this week for US SRWW is around AUD$16.40 lower.

Moving onto more logical things that have an impact on the market…… the new President of Argentina, ex economic teacher 53 year old Javier Milei, announced a 54% devaluation of the Argentine peso against the US dollar. The fall from around 360 to 800 brings the peso closer to the current black market rate for USD, which was trading on the streets for around 1000p/$.
The trade had expected to see something like this and have been busy booking grain export licenses (locking currency in) at the old rate. Milei put a hold on the issue of any further export licenses prior to the announcement. Taxes at the lower exchange rate would be less, the new exchange rate would bring more tax pesos into the government coffers. Possibly doubling the potential pesos collected per tonne from USD sales. There is also speculation that the export tax on grains will also increase by about 3pts to 15%. How this combats domestic inflation is yet to be understood.

France is expected to further reduce sown area of winter cereals over the next few weeks. Wet weather has hampered their sowing efforts. The 30 day anomaly shows 120-150% of their average rainfall has fallen. 14 day rainfall was heavier to the east, 75-150mm. The NW seeing 20-50mm, SW 70mm.