The AUD is spoiling the show this morning, easily turning a small loss in Chicago SRWW futures into a lower day here. The day to day move in SRWW futures converted to a decline of just AUD$0.96 / tonne. The move higher in the AUD tacks another AUD$2.72 downside potential to the conversion.
The US dollar fell to a seven month low on the prediction that the US FED will start to pull back interest rates from September. Powell’s speech is on Friday, so there’s a whole week of speculation to wade through prior to any form of confirmation of this prediction. In the meantime currency traders are pricing in a 25% chance of a 50pt cut in rates, they were calling that a 50% chance last week. The odds on favourite at the moment at 75% chance, is a 25pt cut. The same people predicting this rate decrease in September are also expecting to see up to 210pts pulled out of the FED rate throughout 2025.
The prospect of lower US rates should drag local rates lower, if not we would see the AUD climb sharply higher. Something no exporter would like to see as conditions in the international market are already tough enough.
The borrow yen, invest USD continues to be unwound as the margin is now getting pressure from both the US side and the Yen side.

Russian wheat harvest has passed 58%, reaping around 61mt to date. WorldAgWeather.com shows rainfall over the last 14 days continues to be an issue for both the Russian and Kazakhstan spring wheat crops. Falls of 30-100mm in the region are some 300% to 600% above normal for this time of year. The seven day forecast continues to show the chance of further falls of 15-30mm in the region, with some localised heavy storms potentially producing up to 60mm.
Further west in Europe conditions may finally dry down a little for France and Germany over the next 7 days.
Last night’s USDA weekly crop progress report shows corn condition stable week on week at 67% G/E. Soybeans were stable at 68% G/E, with 81% of the crop setting pods. 83% of the US sorghum crop is in the bin. Spring wheat harvest is progressing slowly, 31% harvested V 36% 5yr avg, G/E +1pt to 73%.