19th August

Morning Comments:

A rally on the Aussie dollar early in the European session was short lived and heavy selling soon followed. Renewed fears for both the US and European economies saw heavy selling on the AUD which shed 1.5% in morning trade.

The hit in US manufacturing during the last month was the catalyst, many had expected to see a slight decline or flatness in the data but instead were presented with a serious downturn in US manufacturing. Higher than expected jobless numbers in the US didn't help and then when a Morgan Stanley report hit the floor suggesting that Europe and the USA are all but in recession then no one could stand in the way.

With weekly US wheat export sales within the trade expected range most of the pressure on wheat was from the outside markets. Some analyst see a close lower tonight as a signal the bounce is over for now and the contract highs may well be in. With the USDA due to amend US production data again before the end of September I'm not so sure there won't be another bounce it will just be interesting to see from how far down the bounce will come.

The charts tell you Dec 11 CBOT wheat is over bought, so technically another close lower tonight could be viewed as bearish and create some selling into the first half of next week. European futures all closed lower with Paris rapeseed the hardest hit losing E5.00/t on the Feb 12 contract.

ICE canola was also lower as CBOT soybean futures slipped a little. At the moment the e session at Chicago see's both corn and wheat lower. Speculation over Russian production has a few analyst assuming the current numbers the Soviet government are showing the rest of the world maybe a little conservative, bumper year's in the past have produced around 10-15% more than current reports would leave you to believe.

Weather:

We may see some patchy clouds move in from the SE through the day but with the low cell now off the east coast significant falls are well to our east. A mass of cloud over SA is riding a high into WNSW and is not expected to produce rain as it moves east. Expect cool conditions to persist over the weekend the balance of August expected to be dry. The first week of Sept could see a shower.

Afternoon Comments:

ASX milling wheat is trading at $258 for the Jan 12 contract, the curent bid / offer is $257 / $261. Track sorghum is dead this afternoon with little interest in the buy side, some tonnage changed hands at $232 but volume has been minimal. Sorghum delivered Inghams Cardiff is still bid in the low $240's but is attracting little interest from the seller, this may lead you to think a higher offer may get set if you have some very dry sorghum to offer. Sorghum into Tamworth continues to be a non event with little or spasmodic interest from the trade. The dollar is sitting in the lower portion of today's trading range but many expect continued weakness in tonights European and US session. E session corn and wheat at Chicago are both fractionally lower but offer little guidance as to the possible direction of the day session at this stage. All new and old crop wheat contracts were lower today on the back of lower US futures, fluctuating currency and outside markets.