11/4/24 Prices
The chance of US rate decreases were eroded as US inflation came in higher than expected. This saw the AUD sharply lower in overnight trade, falling 1.77% against the greenback. I wonder if those traders that blamed the stronger AUD for flat to softer sorghum prices here yesterday will be quick to adjust prices higher here today on the back of a weaker AUD. The AUD was weakest against the Indian Rs, Yuan and USD, a nice trio to fall against for the grain market. It should help a lot, take nearby Chicago SRWW futures for example. Closing just 1/3 of a cent per bushel higher is equal to hardly anything, roughly +42c/t. The move in the AUD is equivalent to about AUD$5.56 / tonne. A similar example can be seen with Winnipeg canola, ICE closed CAD$0.50 / tonne lower, about AUD$0.56 lower, but the change in the exchange rate between the CAD and AUD is worth about AUD$6.77 / tonne. The wires are not really giving a clear explanation as to why Kansas HRWW futures closed so much stronger than SRWW futures or MGEX spring wheat futures. Positioning ahead of tonight’s WASDE report, possibly. A reality check in the form of someone that can actually read a weather map, possibly, but we are talking wheat futures markets here, the algo traders may well be sun baking on the beach while the computers do their trading. |
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