There’s a little more green on the futures boards this morning. Chicago soybeans done a bit of a reversal though, bucking the recent trend higher. The slippage in beans weighed on Paris rapeseed futures and nearby canola futures at Winnipeg, but Winnipeg continues to recover in the outer months after the recent sell off. Kansas (Chicago), Minneapolis and Chicago wheat contracts all closed in the green. This helped Paris milling wheat futures higher even as production data for wheat in the EU shows a recovery from the poor crop of 2024.
Combine the move higher in US and Paris wheat futures with the weaker AUD and there’s some scope for a stable to firmer bid on both old and new crop wheat for the Australian market today. The local market hasn’t been tracking the US futures markets dollar for dollar lately though. There’s been good basis improvement here as US futures slipped away last week. Local values fell by a lesser percentage. So to predict a dollar for dollar improvement inline with US values might be a bit ambitious.
Cash values for US and Canadian wheat out of the US Pacific Northwest were all higher. Comparing today’s PNW US conversions to an Asian consumer and then back to an Aussie port equivalent tells me there’s a day to day AUD / tonne improvement in their cash values of roughly AUD$3.00 for white wheat, AUD$5.00 for hard red winter wheat and up to AUD$8.60/t for both US and Canadian 13.5% spring wheat.
Black Sea values were flat to firmer, Ukraine values clawed back some of the recent losses, the conversion there roughly AUD$5.00 higher while the Russian conversion is basically flat. Argie values bucked the trend higher and actually shed a fair slice of value which would make Argie milling wheat more competitive into the Asian market, but still valued much more than Aussie or US HRWW to the buyer.
We have the weekly US crop progress reports starting this week, plus the US stocks report. The focus is more on outside markets though, namely the AUD. The punters seem to be forming a consensus that the AUD/USD conversion is only going to get weaker short to mid term. Can’t disagree with that.