Market Comment – 10/9/2013
US grain markets lost gains made over the weekend, with soybeans in particular having another disappointing session. Australian canola prices have been on a steady decline after rallying above $560 Newcastle track several weeks ago to now be holding around $500. While the effects of the recent frost will see production reduced in the port zone, not to mention the impact of the continued run of dryness on yield, canola prices have been taking their lead from international markets, with expected large crops in Canada and soybean crops in South America putting pressure on prices. There is still potential for values to rebound with the US crop by no means a certainty and a tilt to dryer weather in growing regions continuing volatility in futures. Early US Corn crops have also begun to be harvested, with respectable yields pressuring futures markets. Wheat futures are being supported by continued international demand, with Egypt releasing another tender recently.
Also of note is the release of production estimates this week, with ABARES releasing their quarterly estimates today and the USDA releasing their monthly WASDE report on Friday morning Australian time. It is widely expected that ABARES will be reducing their Australian crop estimate to below 25 mmt, with persistent dryness in Northern NSW and QLD far outweighing a good season for Southern growing areas.
Windrowing of canola crops north of Moree will begin in the next fortnight, with the earliest crops being harvested by the end of the month. The majority of harvesting will have commenced by mid-October. AgVantage Commodities will be hosting pre-harvest meetings starting this Friday and going in to next week with a focus on on-farm solutions. We will be hosting speakers from Next Instruments running through their grain analysing equipment, Superior Silos with their range of storage systems and a demonstration of Kwik-Kleen Grain Cleaners. Please call the office for more information on these events.
While it has been as dry as it has there has been very little new crop business being traded. Of note we have an option for prompt movement of new crop canola in the first half of October, and are able to price on a hectare basis. Prices are around $510 ex farm north of Moree. Please call if this is of interest.