World grain futures markets appeared to have taken half a breather last night. Digesting the Xi / Trump brief, the USDA crop progress report and falling demand for wheat as US, Argie, EU and Aussie prices remain high, or climb a little higher, may take time. Black Sea wheat remains cheapest on the international market. Working into Asia at something close to US$280 – US$290 C&F, roughly US$22 below current US values when supplying from the Pacific Northwest.
Old crop Aussie, US, Argie and French wheat are all priced relatively close to each other on a C&F Asia basis now. Tariffs and trade deals being the big differences. Ah, the good old level playing field.
The one grain that did take me by surprise a little last night was the US Club White Wheat value out of the Pacific Northwest. This is basically our APW1 wheat equivalent from the US. At 680c/bu FOB, roughly US$250/t, it works into the Asian market for around US$290 C&F. Below east coast Aussie values for a similar grade, but it did go up by roughly AUD$11.00/t once you take the AUD into account from yesterdays conversion. West Aussie APW1 is roughly AUD$404 FOB, US$285/t FOB at this mornings money. This is a big jump in value from earlier in May at the FOB level, and represents quiet a margin between FIS and FOB which may otherwise make Aussie wheat more competitive into the Asian market.
Trumps memo on the Xi meeting claimed commitment to about US$17Bn worth of US agricultural products, excluding soybeans. I wasn’t sure if that was good or bad so I searched the internet to see what China / US ag trade was in 2023 and the result was US$33Bn, including US$15.3Bn in soybeans, so take that off to be comparable and it’s closer to US$17.7Bn……. so this is a win for Trump……….. yeahhhhhh…. O…..K. I guess S.America has been a thorn in the side of the US soybean producer for a couple of years now.                 The Winnipeg canola market was trading again yesterday, playing catch up to the US soybean market, and catch up it did. The day to day conversion comparison, taking the AUD into account, gained roughly AUD$26.20 / tonne.