Protein Markets
- Soybeans top $16 for the first time since 2012.
- US Soybean planting is now 42% complete, vs 22% average.
- China bought two beans cargoes yesterday for July, one Argentine, one Brazil.
- WASDE report due out overnight with forecast carry out stocks/plantings. The average trade guess is less bullish then the last report.
- Brazil’s drought continues to reduce likelihood of any water being released down the Parana River to aid draft restrictions on up river vessel loading.
- China canola production forecast at 14.5MMT up 3% from last year.
- Australian canola prices continue to push near the $800/mt mark for next season.
PKE Markets
- Rains have been widespread across much of the palm belt over the last week helping improve soil moisture.
- Malaysia announces a month long lockdown to curb the latest covid outbreak. Whilst agriculture and shipping are deemed exempt activities logistical /harvest, disruptions are expected to continue to hamper nearby supplies.
- Local PKE markets remain tight as dairy farmers continue to feed late into the old season pushing prices back to recent highs.
Grains Markets
- US corn planting is now 67% complete, vs 52% average.
- Ukraine spring wheat and barley sowing is now complete however, maize and sunflower continues to lag normal pace.
- Investor participation in corn markets is at the highest levels seen since 1995, exceeding 2012 where the US had its worst drought in modern times.
- Brazil Safrina corn crop rated 30% bad.
- Good rainfall across the West Coast of Australia and eastern NSW continue to aid crops.
- Australian cereal crop approx. 30% sown. SA continues to lag normal progress due to dry conditions.
- Australian export capacity remains very tight with severe logistical delays across the east coast and available stocks in SA tightening due to fast export pace.
- NZ maize harvest now over 50% complete in the upper north. Rainfall this week may slow progress. Despite good yields there are very few tonnes remaining in farmer hands.
- AIMI report had NZ crop down 3% on last year. Unsold grain on farm has fallen by 25% compared to this time last year.
- NZ wheat demand remains high, 2022 interest is in strong demand with prices pushing higher in the last few weeks.
Currency / Political
- NZD/USD currently trading at 0.727.
- Probability of fed rate hike slipped as US data comes in poorer than anticipated.
- With US reporting season coming to a close and record profit margins (for now), low yields and a view that holding cash is futile. Companies are returning to buying back their stock at record highs funded but cheap debt.
- Brent oil currently trading near USD68/barrel.
Dairy Markets
- NZ MKP for 20/21 season currently $7.70/kg/ms.
- NZ MKP for 21/22 season currently $7.72/kg/ms.
- NZ MKP for 22/23 season currently $6.81/kg/ms.
- Based on current nearby milk prices if they hold, dairy farmers could be looking a t$9/kg/ms next season.
- Fonterra capital restructure looks to reduce farmer wet shareholding requirements from the current 1:1 ratio to 1:4.
- Fonterra share price has started to bounce back post sell after capital structure announcement.
