The firmer AUD will take away some the inroads made by world wheat values last night. At Chicago SRWW rallied an unconvincing 8.25c/bu, or AUD$4.65. Unfortunately the rally in the AUD is the equivalent to -AUD$1.87, netting a plausible gain of AUD$2.78 in that market in our terms. This is likely to be reflected in swap rates on Monday and may temper the desires of local merchants to track the rally in SRWW, decreasing basis.
Still in the USA it should be noted that cash bids out of the Pacific Northwest and futures contracts for both HRWW and Spring Wheat, were not as strong by the close as SRWW futures were. This may also weigh on local bids here. On Friday we saw Newcastle FOB APW1 basis improve from +28c/bu to +41c/bu, the first significant jumper we’ve seen in local basis for some weeks. Is this an anomaly or a reflection of the amount of seller resistance now evident in the local NNSW / SQLD market at current values for old crop white grain.
Day to day world sorghum values into China were generally a little lower. Taking the move in the AUD into account we see US offers back around AUD$2.00 to AUD$3.00 per tonne. The Chinese index, which was hanging on, was also back around AUD$6.00, but still indicating that Australian sorghum remains by far the best option for the Chinese importer during Q2-3 this year. Quality of the Australian crop is also likely to be exceptional this year, with very good colour and bushel weight.
Black Sea wheat values continue to fall, Ukraine wheat sharply lower and now more competitive with Russian product. Logistics through the Red Sea and Suez Canal continue to be an issue and is one of the reasons we see EU and Russian wheat lower as the seller appears to be paying the price of a longer sea route to Asian markets. There’s more talk of Russia implementing or adjusting what has been an unofficial floor price in export wheat values, this may stabilise the Black Sea offers a little in the short term.
Farmer protests in the EU appear to have succeeded in the dismantling of unworkable restrictions and limitations of EU agriculture, protests continues.