AWB market update

Wheat began the day with strong gains, prompted by the sharp surge in corn futures, however lost momentum as the session continued to finish well back from highs, but still in the black. It was noted that the sudden drop in the Australian dollar resulted in renewed optimism for Australian wheat exports, as the Northern hemisphere harvest begins to wrap up and focus shifts to trends and weather patterns in the Southern hemisphere.

Elsewhere, the Canadian wheat production has been estimated by Statistics Canada at 30.6 million tonnes, the highest level in 22 years.

Chicago wheat for Sept 2013 is 4½ cents higher at 638¾ US cents a bushel.

Corn futures were dramatically higher in trading overnight, with the major stimulus being the warm and dry weather forecast for the US Corn Belt.

Further to this, the crop tours currently touring the US report that growing regions visited are in dire need of rainfall, though only a few states are showing any indication of some precipitation over the coming weekend. Elsewhere, the margin between corn usage compared for forecast usage for ethanol production continues to widen, leading to speculation that the USDA may be overestimating 2012/2013 demand.

Chicago corn for Sept 2013 is 14¼ cents higher at 498 US cents a bushel.

Canola moved slightly higher overnight also, with complimentary gains to CBOT soybeans again promoting optimism for buying in Winnipeg, in addition to an update in production expectations from Statistics Canada, which pegged the canola crop as being slightly lower than previously thought.

Hedge selling was identified as capping some of the gains over the session, with technical resistance also applying pressure.

Winnipeg Canola for Nov 2013 is $2.90 higher at $511.00 Canadian dollars per tonne.

The Australian dollar is currently trading at 0.8979 USD.