Picture if you will, a rock climber, gradually, step by step, grasp by grasp, pulling themselves up the face of a sheer rock wall. This is what the wheat market has been doing this week, making small incremental climbs over the space of the past week, rising up from the multi-year lows seen in late August. Picture then, an impassable overhang in the way of the aforementioned rock climber. Such was last night's USDA September report to the wheat market.
The USDA printed a larger than expected wheat production number, thanks largely to a 2mmt increase to Australian production, now at 32mmt and now in line with ABARES 31.8mmt. Overall Australian exports are tipped to be around 25mmt. Global carryout was also increased by 0.6mmt, to 257.2mmt and above the average trade estimate of 255mmt.
The report was neutral to slightly bearish for wheat with the Dec ’24 contract erasing most of the overnight gains to finish mostly unchanged.
In the long term, it will be interesting to watch which way the wheat market trends. There is possibly a degree of support already being built into the market with a dry outlook for the winter wheat-growing regions of Russia. The sowing window is currently wide open, but the key Southern growing regions remain stubbornly dry. Winter wheat ideally is sown into warm soils with enough moisture to germinate and establish before the crop goes dormant over the winter period. A crop with poor establishment risks greater losses from winter kill should temperatures drop suddenly, or the crop does not have adequate snow cover.
The conflict in Gaza has probably overshadowed the war in and around the Black Sea. Last night a Russian missile hit a ship carrying Ukraine wheat. This might have prompted a sharp rally in the wheat market had this happened in the early days of the war. However, the news barely raised an eyebrow. The ship sustained minor damage and there were no reported injuries, with the vessel continuing its journey. It is a good reminder that the region is at best unstable.
Next week
With the Northern Hemisphere wheat harvest in the bin, attention will turn to Australian production over the critical Spring period as well as the winter wheat sowing program in the Black Sea.
The latest United States Department of Agriculture (USDA) World Agricultural Supply and Demand Estimates (WASDE) report was released last week, but being at the end
This week, commodity markets held its breath as the White House unveiled its reciprocal tariffs. The list of countries impacted by the tariffs was expansive
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.
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.
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.
Russia, USDA and a Rock wall
The report was neutral to slightly bearish for wheat with the Dec ’24 contract erasing most of the overnight gains to finish mostly unchanged.
In the long term, it will be interesting to watch which way the wheat market trends. There is possibly a degree of support already being built into the market with a dry outlook for the winter wheat-growing regions of Russia. The sowing window is currently wide open, but the key Southern growing regions remain stubbornly dry. Winter wheat ideally is sown into warm soils with enough moisture to germinate and establish before the crop goes dormant over the winter period. A crop with poor establishment risks greater losses from winter kill should temperatures drop suddenly, or the crop does not have adequate snow cover.
The conflict in Gaza has probably overshadowed the war in and around the Black Sea. Last night a Russian missile hit a ship carrying Ukraine wheat. This might have prompted a sharp rally in the wheat market had this happened in the early days of the war. However, the news barely raised an eyebrow. The ship sustained minor damage and there were no reported injuries, with the vessel continuing its journey. It is a good reminder that the region is at best unstable.
Next week
With the Northern Hemisphere wheat harvest in the bin, attention will turn to Australian production over the critical Spring period as well as the winter wheat sowing program in the Black Sea.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Image Source: USDA
Data sources: SovEcon, USDA, Next Level Grain Marketing, Refinitiv, Mecardo
Categories
Have any questions or comments?
US plantings respond to price
The latest United States Department of Agriculture (USDA) World Agricultural Supply and Demand Estimates (WASDE) report was released last week, but being at the end
Trade dispute – what is it good for?
A lot can happen in a week. A mere 13 hours after collapsing stock and financial markets across the globe, President Trump reversed most of
Upswing on the canola-coaster
It was back in October when canola charts started to look like a rollercoaster, and it has not let down the thrill seekers. The latest
Day after Liberation Day
This week, commodity markets held its breath as the White House unveiled its reciprocal tariffs. The list of countries impacted by the tariffs was expansive
Want market insights delivered straight to your inbox?
Sign up to the mailing list to get regular updates to new analysis and market outlooks
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.
SERVICES AND CAPABILITIES STATEMENT BROCHURE
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.