International

Black Sea market analyst SovEcon estimates 2024-25 Russian grain production at 127.4Mt, down from 144.9Mt in 2023-24, reflecting lower yields caused by weather anomalies and a reduction in planted area. Wheat production is forecast at 80.7Mt (-13pc), barley at 18.6Mt (-12pc), and corn at 14.6Mt (-12pc). They note that precipitation levels in the Central and Southern regions over the last three months were 60-80pc of normal. In May, crops in Central and Southern regions also suffered from frosts with temperatures dropping to -6°C. 

IKAR have increased their Russian wheat production number from 81.5Mt to 82Mt.  

Brazil’s Conab reports that as at 16 June, 2023-24 first (full-season) maize harvest was 88pc complete (87pc previous year). Secondary (safrinha) harvest was 13pc complete (5pc) as dry weather aided fieldwork but could impact yield potential of later-planted crops. Positive yields have been noted in key growing states of Goiás and Mato Grosso. 2024-25 wheat seeding was 56pc complete (60pc). 

A European Commission MARS update on Ukraine notes weather conditions in 2024-25 winter cropping areas have been mixed, with mostly beneficial conditions in April offset by a rainfall deficit in May and a heatwave in eastern regions in June. Crop abandonment is noted in several areas, with total winter crop area down year on year, particularly in areas near the front line. Average yields are expected to be lower year on year and below the five-year avg. For spring crops, maize area is seen near unchanged, while oilseed area is seen higher year on year, with productivity expected to be similar to the five-year average. Total wheat area (including in uncontrolled territories) is estimated at 5Mha (-17pc yoy, and 24pc below avg). Production is forecast at 20.6Mt (-25pc, -25pc). Winter barley acreage is estimated at 0.8Mha (-5pc, -21pc), with production at 2.9Mt (-12pc, -19pc), spring barley area at 1Mha (-10pc, -20pc), production at 3.5Mt (-9pc, -17pc). Maize area is pegged at 4.1Mha (unch, -15pc), production at 28.8Mt (-9pc, -13pc). Canola area estimated at 1.5Mha (-6pc, +16pc), production at 4Mt (-12pc, +16pc), sunflowerseed at 6.3Mha (+1pc, +3pc), production at 14.4Mt (-3pc, +1pc), soybeans at 2.2Mha (+14pc, +40pc), production at 5.4Mt (+8pc, +45pc). 

Chinese customs data shows May corn imports at 1.1Mt, down 37pc from May 2023, with cumulative year to date at 10.1Mt (-1pc). Wheat imports were 1.9Mt, up 61pc from May 2023 with cumulative at 8.1Mt (+13pc), barley at 1.6Mt (+26pc), cumulative 7.7Mt (+93pc) and sorghum at 670kt (+2pc), cumulative 3.7Mt (+122pc). 

Australia

Local markets were quiet yesterday as the continued weakness in offshore values keeps both the trade and the grower in a standoff to see where this market ends up. The ASX Jan 25 wheat contract ended the day down another A$8/t at $361/t, now down around $12/t over the last week as it follows the offshore lead. The current 8-day rainfall forecast doesn’t provide much direction either, with cropping regions in WA, SA, Vic and southern NSW expected to pick up 5-15mm.

As expected, the RBA Board kept the cash rate unchanged at 4.35pc at yesterday’s meeting. The RBA board said the path of interest rates that would ensure inflation returns to target in a reasonable timeframe remained uncertain and further rate hikes can’t be ruled out.