“May you live in interesting times” is a phrase often attributed to a 19th-century House of Commons speech. While it reads like a vague blessing, it’s more a tongue-in-cheek curse, wishing the recipient anything but calm and stability. Judging by the political upheaval of late, we’re certainly living in “interesting times”…
The biggest story this week was the truce reached between China and Canada over EV tariffs and the corresponding anti-dumping investigation into Canadian canola and pea exports. China will roll back its import tariffs from 85% to 15% from March 1, with Canada also set to ease tariffs on Chinese EVs. Rumours of a deal, and then the confirmation, have helped propel the Winnipeg ICE canola contract almost CA$30/t higher since the start of the year.
For holders of GM canola, this is positive news in the sense that local GM values should track the improved Winnipeg market. The less encouraging side is what it means for Australian export flows. Chinese importers were quick to book Canadian seed as soon as the tariff cut was announced, so shifting the volume we’d hoped could move into China may now prove a tougher task.
Wheat found some support from Algeria and Saudi Arabia announcing large tenders, which were ultimately bought “overs”. Origins included the Black Sea and Argentina.
The market is also keeping a close eye on cold conditions across Ukraine and Russia. Temperatures are low, even by Russian standards, enough to raise winterkill concerns. That said, snow cover is expected to be adequate across key southern regions, which should limit widespread damage. The US is also bracing for an Arctic blast this week, with temperatures forecast to drop below -12°C as far south as Oklahoma and Texas.
Geopolitical tension, or perhaps growing exasperation, flared again as the US doubled down on its claim to Greenland. Trump’s assertion that it will become US property “one way or another” has dominated headlines. While the tone softened slightly after this week’s global leaders meeting in Switzerland, there remains enough uncertainty to keep markets on edge.
Meanwhile, the US is printing money at a pace not seen outside a brief burst during COVID. Over the past 12 months, US money supply has increased by US$1.7 trillion. Two years ago, it was shrinking. The suspected aim is to cushion an emerging recession, particularly ahead of the mid-term elections. The result is a US dollar that is steadily losing ground against a basket of currencies, including our own.
Interesting times indeed.
Next week
The wheat market continues to watch temperatures over central Russia and parts of the US next week. Prolonged exposure to deep cold in any areas not protected by adequate snow depth could be at risk of winterkill. While global wheat supplies remain on the heavy side, any perceived risk to this year’s crop will be priced accordingly.
This weeks commentary is more about macro-economics and geopolitics that anything directly wheat oriented. Having climbed to over 0.70USc, the AUD has tipped over in
The final harvest reports are in, with further updates likely to offer minimal changes. Western Australia has received the promised bumper crop, while receivals on
The global canola trade had another significant shift last week with China reducing tariffs on Canadian canola. The response in the Canadian markets was strongly
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Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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Interesting Times
The biggest story this week was the truce reached between China and Canada over EV tariffs and the corresponding anti-dumping investigation into Canadian canola and pea exports. China will roll back its import tariffs from 85% to 15% from March 1, with Canada also set to ease tariffs on Chinese EVs. Rumours of a deal, and then the confirmation, have helped propel the Winnipeg ICE canola contract almost CA$30/t higher since the start of the year.
For holders of GM canola, this is positive news in the sense that local GM values should track the improved Winnipeg market. The less encouraging side is what it means for Australian export flows. Chinese importers were quick to book Canadian seed as soon as the tariff cut was announced, so shifting the volume we’d hoped could move into China may now prove a tougher task.
Wheat found some support from Algeria and Saudi Arabia announcing large tenders, which were ultimately bought “overs”. Origins included the Black Sea and Argentina.
The market is also keeping a close eye on cold conditions across Ukraine and Russia. Temperatures are low, even by Russian standards, enough to raise winterkill concerns. That said, snow cover is expected to be adequate across key southern regions, which should limit widespread damage. The US is also bracing for an Arctic blast this week, with temperatures forecast to drop below -12°C as far south as Oklahoma and Texas.
Geopolitical tension, or perhaps growing exasperation, flared again as the US doubled down on its claim to Greenland. Trump’s assertion that it will become US property “one way or another” has dominated headlines. While the tone softened slightly after this week’s global leaders meeting in Switzerland, there remains enough uncertainty to keep markets on edge.
Meanwhile, the US is printing money at a pace not seen outside a brief burst during COVID. Over the past 12 months, US money supply has increased by US$1.7 trillion. Two years ago, it was shrinking. The suspected aim is to cushion an emerging recession, particularly ahead of the mid-term elections. The result is a US dollar that is steadily losing ground against a basket of currencies, including our own.
Interesting times indeed.
Next week
The wheat market continues to watch temperatures over central Russia and parts of the US next week. Prolonged exposure to deep cold in any areas not protected by adequate snow depth could be at risk of winterkill. While global wheat supplies remain on the heavy side, any perceived risk to this year’s crop will be priced accordingly.
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Data sources:CRM Agri, Reuters, StoneX, Bloomberg, Next Level Grain Marketing, Mecardo
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.