Most punters appear to be factoring in a rate rise from the RBA this week. A survey carried out by The Guardian has suggested 34 of 39 analyst are predicting a 25pt move higher to the base rate. I’d like those odds on a horse in the cup. The punters are now predicting to see the AUD push towards 67c in the near term. In regards to wheat, that would be equivalent to about AUD$8.83/tonne straight off the top in currency.
A rate rise this close to the busiest retail time of the year could be devastating to many small and medium sized businesses and may actually stall the desire to purchase major agricultural inputs for another year for those that haven’t already closed the cheque book due to drought.

Low water in the Gatun Lake, the major lake in the Panama canal, continues to slow ship traffic. This has slowed traffic from both S.American and US moving into the Asian markets from their eastern ports. There is even speculation it could slow durum shipments from Canada as the Lakes freeze and access to the Atlantic is restricted by ice. Not good new for consumers of Canadian durum. There is already delays due to strikes. Ones the lakes freeze the only access to Canadian durum for the Mediterranean and N.African markets will be out of the PNW and through the Panama canal.

Canadian canola futures at Winnipeg moved higher overnight. Assisted by stronger soybean futures at Chicago. The bean market found support for good returns on soyoil. Soymeal did fade though. The US continues to recover from a slow start to the export year on beans. Brazil shipped 5.5mt of soybeans in October, taking their yearly export volume to 92.8mt. That’s not a lot smaller than their entire crop back in 2018/19.
How long Canadian values canola continue to climb without an increase in export volume will be key to this. The weaker USD will play a roll too.