Another ‘geopolitic' type of week, with little fundamental news but lots of political intrigue to keep the market ticking over.
News that the US President had issued a 28-point peace plan to finally end the dispute in Ukraine was met with wheat prices initially tumbling on optimism that an end was nigh. The fall stalled when it became evident that the 28 points was a Christmas wish list from Russia, but that hasn’t stopped the media cycle that negotiations are ongoing.
China bought another 10 vessels of US soybeans this week. This brings the total purchases made since the Trump-Xi meeting to somewhere between 1.6 and 2mmt. Beijing is being a little vague on its overall commitment, believed to be around 12mmt. While the recent purchases are a welcome sign for US farmers and oilseed values, there are a few questions whether the full total can be achieved.
Firstly, China has announced a pig cull to help stabilise pork prices. Pork prices have tumbled recently due to oversupply and poor demand. The decision to cull breeding stock will ultimately have an impact on feed demand. Secondly, it is thought that Chinese warehouses are groaning at the seams with imported inventory. By the end of October, China had bought 96mmt (all origins) of soybeans, of which Brazil is believed to have supplied >85mmt.
Northern hemisphere 2026/27 winter crop planting is finishing relatively smoothly. Ukraine has managed to plant 4.7mHa despite increased risks. Russian winter wheat is in good shape ahead of winter, US wheat planting is mostly finished and ahead of schedule, with condition reports showing 48% of winter wheat crops are in good/excellent condition compared to 55% a year ago.
Next week
The wheat market remains under pressure. A modest uptick in US export inspections offers a glimmer of support, but until there’s clear demand from major buyers, the burden of excess supply is likely to keep a lid on any rallies.
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Thanksgiving caps a flat week
Next week
The wheat market remains under pressure. A modest uptick in US export inspections offers a glimmer of support, but until there’s clear demand from major buyers, the burden of excess supply is likely to keep a lid on any rallies.
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Data sources: Commbank, CRM Agri, Reuters, USDA, Next Level Grain Marketing, Mecardo
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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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