US wheat futures saw significant gains overnight. Nearby soft red winter wheat futures at Chicago was up 28.5c/bu, about AUD$14.91/t. The AUD is up 0.57%, taking back some of the cream, but seeing futures up AUD$13.00/t day to day is encouraging.
I’d love to be able to talk about freezing rain in Russia, a huge import order, drought in the USA, or anything fundamental that is supporting this rally, but there isn’t anything. It’s simply a general commodities buy that is garnering it’s strength from spillover from oil. Maybe a little fund money getting parked in grains as a hedge against inflation, but otherwise it’s simply spillover support from oil.
WTI crude oil futures are up US$10.15/b as I write. The WTI crude oil April futures contract is now at US$91.15/b. September WTI crude futures are up US$2.87/b to US$73.03/b and December futures are up US$1.84/b to US$69.07/b as of 7.22am.
Soybean futures were also sharply stronger, defying the fundamentals for soybeans. Looking at fundamentals alone, the only US grain that should be seeing any major push higher would be corn. So sticking to a theme in a world with failed logic, corn futures have moved the least, nearby up just 5.5c/bu, just over AUD$3.00/t.
With the big winners being wheat and oilseed futures, we may see some nice price moves for new crop canola on Monday or Tuesday.
At the moment a weekend is a long time in commodity markets, but with the day to day conversion for Paris rapeseed futures improving by AUD$7.29/t and the Winnipeg’s conversion comparison up AUD$12.48/t, there’s scope for more upside. Comparing current Canadian canola values to Aussie values C&F China, including tariffs, we see that the Canadian product is now roughly US$15.00 more expensive than the Aussie product, a sharp turnaround.
International sorghum values were higher. The price anomaly for cash sorghum out of Argentina seen yesterday was still there today. Possibly signalling a problem with Argie product or execution. C&F China values were higher by less than a dollar, the stronger AUD countering much of the move.