A quieter week at the Chiropractors Clinic
By Tyson Hosie
1st June, 2022
Of late, it would seem, a market-moving event was a daily occurrence, with both domestic and international commodity values reacting accordingly. Anyone trying to keep abreast of the recent volatility would be well advised to have their local chiropractor on speed-dial, with the whipsawing settlements testing even the most seasoned of spines.
Two of the greatest influences in any agricultural market are government influence and the weather, both of which have been dominating headlines here and abroad for much of this past year and are set to continue well into season 2022/23.
This past week has been a somewhat slower news week though, with an almost pleasing lack of “big moments” to move the market affording participants the chance to focus on some themes closer to home, such as our own ongoing weather concerns or the continuing struggle being faced in the logistics department.
Eastern Europe remains as the dominant influencer of international market movements and will continue to be until a resolution can be arrived at. The recent promise of Black Sea grain and oilseed exports resuming in the coming weeks was met with heavy scepticism from the trade, as the crisis in that region sadly rolls into its fourth month.
This well-documented situation has seen other origins forced to react, with India recently banning wheat exports in a bid to manage domestic food inflation on the back of reduced Black Sea supply, as well as Indonesia, albeit briefly, halting cooking oil exports on the back of the skyrocketing oilseed complex.
These few examples of government influence over trade flows have exacerbated the other primary driver of markets – the weather – and its obvious impact on current and future availability of product.
The market remains on high alert in terms of production, as without the usual voluminous involvement of the Black Sea region, the balance of the globe’s suppliers can ill-afford a misstep. The mere whisper of a downward adjustment in figures amongst the exporters is a red rag for the bulls, whilst the suggestion of an improvement is enough to trigger a retracement.
The market has digested much of the latest global production figures and seems to have found a fine balance. Roughly a third of the US wheat crop is considered in good-to-excellent shape, whilst around three-quarters of the French crop is reportedly in the same condition, although recent dry weather has trimmed forecasts somewhat.
Australia and Canada are grappling with wet planting conditions, which underpins the canola and wheat markets on the threat of underperformance; however, it is tempered by the promise of a strong result, should the crop get a late start into favourable soil moisture. And it’s best not to linger on the progress of Australian summer crop harvest…
So, all things considered, having a quieter week for the market to catch up on after a truly volatile first half of 2022 was welcomed by most. Well, maybe not the chiro…
Grains market lifts in face of season’s challenges
International wheat futures have consolidated this week after rallying last week on the back of India’s decision to abruptly ban exports.
Indian export ban causes import headaches
The global market caught a shock late last week when India announced an abrupt ban on its wheat exports on May 14.Read More
A logistical nightmare
The recent harvest provided a physical and emotional rollercoaster with the highlights of big yields and strong pricing counterbalanced by persistent harvest rains and the subsequent delays and quality issues.Read More
Oilseed demand lifts acreage
Significant increases to crop input prices hasn't slowed the efforts to plant this year's winter crop as almost the entire east coast has been gifted a well-timed and wide-spread autumn break.Read More
Optimal conditions align for winter crop
As sowing programs across the country ramp up on what for the most part is a full moisture profile, Australian farmers look primed to capitalize on record prices for their product.Read More
Where to from here
In recent months 'volatile' seems to have been the word of choice to try and describe grain market movements and, given we unfortunately don't appear any closer to a resolution to the crisis in Ukraine, it appears this description is likely to remain popular for some time yet.Read More
Existing world grains issues persist
Another week rolls by and another round of inputs into the discussion, more forcibly argued depending on the side of the fence you sit, seller or buyer.Read More
Watching for the flashes
Without a meaningful resolution in sight for the crisis in Ukraine, the market continues to trade under the expectation that disruptions to Black Sea grains and oilseeds will be felt for a while yet, increasing the requirement for alternative origins to step up and fill the shortfall.Read More
Sowing intentions start to emerge
International markets continue to trade erratically on the back of expected supply chain disruptions due to the situation in Ukraine. Whilst we all hope for a swift end to the conflict, it is impossible to predict how things will progress and as such international markets continue to trade volatile ranges on a daily basis.Read More
Some other things to watch
There is no doubt that the most significant influence on today's grains and oilseeds markets is the situation in Ukraine - the unknowns of what will be planted, fertilised, harvested and exported from this important region is creating a nervous trading environment, prone to jumping at shadows.Read More
Volatility likely to remain a key theme as we near sowing window
As the devastating situation in Ukraine continues to reverberate around the world, we saw the dramatic effect on commodity markets last week with large price swings as the market digests each headline.Read More