US wheat futures closed sharply lower overnight dragging both Paris milling wheat futures and London feed wheat futures lower. Corn and soybean futures at Chicago were also lower, both commodities suffering double digit declines by the close.
November 2024 soybeans closed over 30c/bu (AUD$16.50) lower. This had a negative impact on what had been a resilient canola / rapeseed market. Paris rapeseed in the Feb25 slot closed €13.25 lower. Taking the daily change in AUD / Euro into account, this represents a move of roughly -AUD$21.56. Winnipeg was not as bad, shedding in AUD terms for the Jan25 slot roughly AUD$10.26 per tonne.
We have a USDA World Ag Supply and Demand report out on the 12th US time, so Saturday morning here. One might expect to see some technical positioning in the futures market prior to the release, but sharply lower US wheat futures was a little unexpected considering that US wheat is already priced well into most destinations. This was evident from the last US weekly export sales report out 4 days ago where it was noted sales at 805,300 tonnes. Mexico and Asian markets dominated the consumer side.
The weekly USDA crop progress report isn’t going to help stop a slide in futures tonight. The US corn rating was up 1pt to 68% G/E. Although there were reports of widespread hail damage in parts of Nebraska, generally the US corn crop has sat in mud for weeks now and has had little heat to contend with. The weekly soybean G/E rating was also up 1pt to 68%. Soybeans don’t like the wet as much as corn, but so far it doesn’t seem to be hurting prospects in the US too much. Roughly a quarter of the US sorghum crop is now in head, the G/E rating for sorghum was 50/8 – 58% last week, this week we see 46/13-59% G/E, it’s not getting worse. Winter wheat harvest in the US is progressing quickly, at 63% complete it is 11pts above the 5 year average, hence the pressure on prices. Around 59% of the US spring wheat crop is now in head and the G/E rating went up from 61/11 – 72% last week to 65/10 – 75% this week. The weather remained damp across the eastern US spring wheat districts and may stay that way for the week ahead, producing some doubt in quality.