The US dollar continues to rise against the other major currencies on prospects of a US rate rise in December. The Aussie dollar continues to fall against the other major currencies and is now back under 74c, in fact it’s closer to 73c this morning.

Combining a stronger close in US wheat futures and the fall in the dollar we could see $4 – $5 put on local wheat values on Monday if basis doesn’t continue to slip. Since our harvest started local basis has gone from +90c to +45c ($22/t  gawn), that’s halved. Basis traders buy weak basis and sell high basis, so don’t be surprised if prices do not do as they should on Monday. In fact local APW prices set a seasonal low yesterday at $225 less rail. Looking at Chicago wheat futures over the same time frame we see that Dec futures are close to $10 off their seasonal low, a low set back at the end of August towards the end of their harvest, are you seeing a trend here. Wheat prices in the US haven’t done a lot since the end of August either, trading just under a $15 range.

Over at the Black Sea we see that the Russians have sown about another 1mha of winter wheat this year while neighbours Ukraine are down a bit on last year thanks to less than ideal sowing conditions.