The AUD is back 0.64% against the green back this morning, but up a little from late yesterday afternoon after setting a 12 hour low of 64.64USc. It’s a nice move lower, and the fact it is combining with a slight recovery in both international cash and futures makes it all the sweeter. The move in the AUD alone is worth about AUD$5.00 – AUD$6.00 per tonne for canola, AUD$2.00 to AUD$3.00 for wheat, AUD$2.50 for barley, and about two bucks for sorghum. For examples sake a move of AUD$9.77/t higher in nearby SRWW futures at Chicago may suggest we have scope for a recovery here on Monday.
To put the move into perspective we see SRWW December futures closing at 580.5c/bu, (confusingly, again higher than HRWW). The move in SRWW takes it back to just over Mondays settlement, but still below last Fridays settlement. The AUD was 65.07 last Friday, 20pts higher than this morning. Not a lot but the SRWW futures value converted to AUD/t last Friday was AUD$333.01/t. Last nights Dec settlement is equivalent to AUD$328.80/t, still AUD$4.21/t lower than last Friday. During the week we shed AUD$5.00 / tonne in the new crop APW track bid. This might be suggesting that as much as we’d all like to see Monday’s bids jump AUD$10.00 per tonne, the reality may a smaller gain and with possible basis erosion.

The fundamental strength in last nights international wheat market is harder to determine than one might expect. Geopolitical issues are getting a little thick on the ground, Russia / Ukraine war, the EU re-introducing the quota system on Ukraine wheat. Iranian missiles in Tel Aviv, Israeli missiles in Iran, crude oil up 7.55%. 24 hours is a long time these days. Then we have the actual grain market fundamentals. A terrible finish to the Chinese winter wheat crop, persistently dry conditions in N.France. A perfect spring wheat season to date for Russia and Kazakhstan. Too much rain in parts of the US spring wheat belt, not enough rain across the Canadian Prairies. I’m not saying I don’t enjoy my job, analysis is all about a lot of ingredients in a pot at any one time, but the last 5 years has taken this to a whole new level. The two main things on my radar now is the weather in Saskatchewan and the AUD. The rest is see as noise at present.