AWB market update

Wheat surged overnight, following corn's dramatic improvements as technical momentum gathered pace to spark further buying support and short covering.

It was noted that growing regions in Argentina and Brazil both face potential freeze damage after lower temperatures this month, which means a greater potential upside for US wheat, going on current export levels to Brazil. Furthermore, hot and dry conditions will increase in Europe this week, though not to the extent currently seen in the US.

Chicago wheat for Sept 2013 is 20¼ cents higher at 654¾ US cents a bushel.

Corn, leading the bullish markets in Chicago, was significantly higher overnight. The primary factor involved in the gain related to the recent crop tour across the US Midwest, which suggested that the expected corn crop size may be overvalued by as much as three hundred million tonnes. Further to this, the hot and dry weather continues to affect the US corn crop adversely, with some substantial losses to yield and condition expected in locations in the central Corn Belt.

Chicago corn for Sept 2013 is 20¼ cents higher at 515¾ US cents a bushel.

Canola was substantially higher overnight, taking an upward trend in line with gains made by Chicago soybeans (where concerns for reduced yields have stemmed from the recent hot and dry weather in US growing regions). Further to this, concerns for an early Canadian frost with the potential for crop damage added to the bullish tone, though an uptick in farmer selling did cap some of the gains, as did the ultimately bearish outlook for the 13/14 Canadian canola crop overall.

Winnipeg Canola for Nov 2013 is $22.30 higher at $538 Canadian dollars per tonne.

The Australian dollar is currently trading at 0.9030 USD.