Paris milling wheat followed Chicago soft red winter wheat futures lower. Hard red winter wheat futures were flat to firmer, while spring wheat futures gained 8.75c/bu (AUD$4.79) in the December slot.
Cash bids for 1CWRS13.5 spring wheat across SE Saskatchewan were up roughly C$5.90 for a December lift, closing the day with an average bid of C$253.56/ tonne according to PDQ. On the back of an envelope this would work back to an XF LPP price comparable to something close to AUD$300 – AUD$310, using NE Asia as a consumer. Both US and Canadian cash values for higher grade wheat out of the Pacific Northwest closed higher by roughly AUD$5.00 to AUD$6.00, while mid grade milling wheat was a couple of dollars better day to day.
The big winner overnight was canola and rapeseed futures. Winnipeg canola put on roughly AUD$20.76 for the Jan25 slot day to day. Cash bids ex farm SE Saskatchewan were higher, up roughly C$17.74 (AUD$19.30). Nearby values out of the PNW were up roughly AUD$17.03. Using China as a consumer the PNW price converts back to a number close to AUD$ 660 XF LPP, this compares well to current new crop bids of AUD$682 XF LPP.
EU rapeseed yields continue to disappoint. With the harvest progressing quickly it is now becoming evident that the EU crop will be smaller than expected, wet weather, frosts and disease all taking their toll on canola in Europe this year.
Combine the lower yields across Poland, Germany and France with an expected reduction of 10% in Ukraine (UA, 1.11mt of an expected 3.8mt harvested) and we should continue to see healthy demand from Europe for both Canadian and Australian canola through 2024-25. Some analyst are expecting to see a overall reduction in demand from importers but with the current production estimate in western and eastern Europe continuing to slide this is becoming more questionable. Overall the S&D continues to show demand exceeding production by roughly 2mt, this should roll through to a reduction in world canola carry over stocks, falling from 7.1mt to roughly 5.6mt, something not expected 3 – 6 months ago.