Australian drought continues while China offers US soy quota
As Australia nears harvest, its market hit seven-week lows yesterday but there is zero export potential at this stage. On Friday, the National Australia Bank reported that the wheat crop could be capped at 15.5 million tonnes due to extreme dryness.
US markets fell slightly as the EU and Black Sea compete to sell wheat. Tenders from North Africa are appearing daily so the demand is good.
After a period of prolonged dry weather, Argentina has seen some beneficial rainfall on crops that will hit the export market in the next couple of months. In Western Europe, cereal drilling picked up last week and is gaining momentum this week thanks to a dry forecast on the continent.
In terms of ongoing trade negotiations, China has granted a tariff-free quota to buy 10 million tonnes of US soybeans which is very encouraging.