Market Overview and Weather Conditions Impacting Agriculture

Recent developments in the agricultural sector reveal a mix of promising weather patterns and fluctuating market conditions. As we delve into the details, it becomes evident that various factors are influencing crop performance, global trade dynamics, and pricing trends across key commodities.

Weather Conditions: The Central and Southern Plains are witnessing dormant wheat in favorable condition, with recent snowfall potentially mitigating early-week cold damage. In the Delta and Midwest regions, recent rainfall has significantly benefitted Soft Red Winter (SRW) wheat crops. However, the Eastern Black Sea region reports poor wheat conditions, while Spain, Italy, and North Africa are experiencing beneficial rainfall. Conversely, northwestern Europe is facing excessive moisture, and southeastern Europe is grappling with drought. In China, wheat conditions are generally favorable.

Market Dynamics: The latest weekly sales data has provided a boost to corn and wheat markets. In South America (SAM), corn prices are supported by improving weather, although some dryness persists, driving futures higher. Additionally, former President Trump’s commitment to resolving the Russia-Ukraine conflict is anticipated to positively influence wheat prices, particularly as the Russian Ruble strengthens.

Outlook for Australia: The market is expected to remain steady. The recent uptick in wheat and corn prices is likely to be countered by an increase in the Australian dollar. However, strong feed bids and lower container rates are anticipated to gradually elevate bids across all wheat grades in the eastern regions of Australia.

International Market Insights

The U.S. Department of Agriculture (USDA) has reported corn sales reaching 2 million tonnes (Mt) across both marketing years, surpassing analysts’ expectations of 1.7 Mt. Wheat sales also exceeded forecasts, although soybean sales were notably lower than projected. In terms of corn exports, the old crop has nearly reached 65 million bushels for the week, reflecting a 12% increase from the previous week and a 20% rise in the four-week average.

On the European front, France’s agricultural ministry has revised its 2024-25 non-EU wheat export forecasts, decreasing them by 100,000 tonnes to 3.4 Mt—the lowest estimate since the 1996-97 period and down by 67% from the 2023-24 forecast. Conversely, intra-EU wheat exports have increased by 100,000 Mt to 6.24 Mt, positioning them just 50,000 tonnes below last year’s levels.

In China, soybean meal prices have surged over 25% early this year, reaching a one-year high due to tight supply conditions and delays in Brazil’s harvest. Compounded by longer customs wait times, import limitations, and escalating trade tensions with the U.S., China is increasingly reliant on Brazilian soybeans, thereby reducing its dependence on U.S. imports.

In South America, the Brazilian government’s Conab agency has raised its corn production forecast by 2.46 Mt to 122 Mt, while Argentina’s Rosario Grain Exchange has reduced its production estimate by 2 Mt to 46.6 Mt. Furthermore, Saudi Arabia’s state grain importer has issued a new tender for 595,000 tonnes of 12.5% milling wheat for shipment between May and July, seeking ten consignments of hard wheat to be delivered to the ports of Jeddah, Dammam, and Yanbu.

Domestic Market Analysis: Australia

In Western Australia (WA), current canola bids remain steady at around A$850, with new crop bids at $805. For wheat, bids are at $377 for the current crop and $392 for the new crop. Barley bids are approximately $340, with new crop bids at $310. In the eastern regions, canola bids are around $765, with new crop bids at approximately $740. Wheat bids stand at $346, while barley prices have improved to around $318.

The weather forecast indicates widespread rainfall throughout the eastern and western regions of Australia, with predictions of 15-25 mm for most WA cropping areas and 25-50 mm across parts of New South Wales and Victoria. Early reports suggest an increase in faba bean hectares planted ahead of the 2025-26 season, driven by strong prices that currently see delivered Geelong bids around $640.

New season canola bids for crushing are emerging, with delivered prices at Footscray around $770 and Newcastle at $780. These trends reflect a dynamic agricultural sector that is responsive to both domestic and international market influences.