Prices 4/12/18
The US markets seemed pretty happy with the rhetoric coming out of the G20, the main driver being the pledge from China to open up their markets further thus reducing the trade deficit with the USA. In response US tariffs on Chinese import will remain unchanged in the short term.
The initial response saw currencies firmer and grain futures rally. Wheat, corn and soybeans all closing in the black overnight. The AUD pushed higher quickly before slipping a little mid-morning only to rally again mid-session setting a session high of 73.92. The AUD gradually slipped away in the afternoon, actually closing lower than were it opened. For currencies the global picture is probably not as rosy as some construct in the grains market. Slow global growth remains the key issue at present.
ABARES pulled back the Aussie wheat crop to 16.96mt. WA production was increased slightly to 9.68mt while the wheat crop in NSW was reduced to just 1.98mt. The national barley estimate was also reduced by 1mt to 7.3mt in total. Canola production was slashed by 600kt from their September estimate to just 2.2mt.
Weekly USA wheat export inspection figures, although higher than last week are still not meeting the USDA number, which is now closing in on 700kt/wk in order to meet projections. Russia shipped 600kt last week and continue to try and slow export volume.