International Commentary

US wheat futures opened firmer but succumb to profit taking by the close. After closing higher for 4 consecutive sessions some profit taking was in order. There’s no change to the global fundamentals at present. US and Russian winter wheat is fine and there’s been no disruption to the flow of wheat out of the Black Sea at present even with the escalation. Ukraine threw some British made missiles over the Russian border last night.

US weekly wheat export sales were supportive at 549.6kt, up 45% from the previous week. Asian buyers featured heavily, S.Korea 200.1kt, Indonesian 73kt, Japan 64.7kt, Thailand 13kt and Mexico 91kt were some of the larger sales. US weekly wheat export inspections were poor.
The US also reported net sales of 121kt of sorghum, down 14% from the previous week. China is the buyer. This could be viewed as supportive. Current Aussie values for the new crop remain well positioned to price into China, chart attached.

Canola and rapeseed futures were crushed overnight. A weaker soybean complex weighed on the futures market for oilseeds. Combine this with another move lower in palm oil and a potential increase in both Brazilian and Argentine soybean area and it’s the perfect storm for a decline in global oilseed values.
The fall of €20.75 / tonne in Paris rapeseed is equivalent to a fall of AUD$37.43 when compared to yesterday’s conversion to AUD / tonne. The change in the Winnipeg conversion day to day is also large, equivalent to a decline of roughly AUD$39.97 compared to yesterday. This will weigh heavily on local canola bids today.
The trade are negotiating for December or January transfers as opposed to November, combine this with the huge fall in global oilseeds values overnight and local canola prices are likely to suffer badly today.

Domestic Commentary

Local markets were quiet again from a brokerage perspective. Harvest operations are picking up again after recent rain on the LPP. Growers are focused on getting the crop in the bin where they can. Marketing continues to offer two views, a short to mid term flat market without any political intervention, or a longer term view into at least Q2 2025, punting northern hemisphere crop condition in spring.
Sprinkle a healthy level of political intervention into the later marketing model and it’s little wonder we are seeing growers taking the cash on offer at current values. The political world is…. potentially heading in the right direction… we are just not sure who is driving the bus, which way it’s going, where we’re going, what’s at the end of the trip, and if indeed this is a bus……. and where are the drinks.

Local milling wheat values crept a little higher, something we probably won’t see repeated today. The AUD is a smidge firmer and US futures are lower. If offering Prime Hard above 14% protein for sale go in hard, there’s not heaps of it. Yesterday saw H2 bid at $310.75 delivered G’corp Spring Ridge. Over the course of the week US HRWW values out of the PNW had moved AUD$10.62 higher, when taking the weaker AUD into account. Local H2 values had only moved AUD$8.00 higher since Friday. Not a bad effort, but not inline with the move in US values. This did close the gap between HRWW & H2 from an Asian importers perspective, keeping Aussies H2 in the mix. The biggest problem now is clearing the way for port exports. Chickpeas (and barley and faba beans) slowed NSW port through put. Look for more competition in the milling grades come Jan / Feb / March.