AgVantage Commodities Market Report 30/4/2013

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Strong gains across the board in all grains pits last night. Wheat saw risk premiums added to the market due to uncertain losses across the winter wheat belt due to drought and freezes. Strong export inspections were also noted and a spillover from corn saw the May wheat contract close up 21 cents at 709.75US cents/bushel. Corn also broke through overhead resistance and finished up 40 cents for the May contract. New crop months were also up strongly as corn plantings have been delayed due to cold, wet weather and a gloomy forecast for the first week of May. Corn planting pace is the lowest it has been for 20 years, at around 9% complete (53% last year). Soybeans also saw strength from good meal demand and a spillover from corn. May beans closed up 41 cents at 1471.75Us cents/bushel.

Cotton also caught the coat-tails of grains and the July contract was up 165 points to close at 95.90US cents/pound. Cotton’s planting pace is only around 6 percentage points below ‘normal’ and wasn’t significant enough to give a bullish tone to the market.

Locally, we have demand for chickpeas ex-farm west of Narrabri or delivered Dubbo for May/June delivery. Prices are around $490-495XF, depending on location. Last week we had strong demand for ASW in certain sites for April transfer, which has now been filled. Sorghum into Narrabri for April delivery shorts have also been filled and we are now shifting to a May/June delivery with prices slightly below last week’s numbers.

With current wheat/sorghum spreads being quite narrow, consumers have shifted to a preference for wheat. We currently have demand for all lower grade wheat in the system or ex-farm from the LPP, north to the border and in the Central West region. Last week 70/10 traded at $250XF on the LPP region and today is around $270/mt delivered Tamworth for May delivery. Demand for high protein wheat in to the packers is fairly minimal with prices stagnant and growers who are holding this quality of grain are generally west of Narrabri and as it remains dry are not looking to sell at the moment.

We have a buyer looking to source old crop fabas, if you have stocks and are looking to price, please give us a call. Mungbeans continue to remain strong and we are buyers of mungs into Goondiwindi. Prices are currently POA so please call to price individual parcels as we have been competitive.

Cotton today is at $427/bale for 13 crop. Picking is progressing well due to the perfect weather conditions with most growers 50% complete or better across the northern Valleys.

Packing some training into team AgVantage

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With some new faces added to the AgVantage team over the past few months, we had a morning of training with Wayne Condon from Converge Consulting.

One of the goals for 2013 for AgVantage Commodities is to develop a training and development program for our staff to enable them to grow both personally and professionally.

At the back we have Brooke, Jake, Erin, Sam, Chris & Steve.  At the front are the new guys – Luke, Geoff & Rob.

Erin turns 30!

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Erin turned 30 on the 7th of April so we celebrated at our weekly Staff meeting on the  5th with Erin’s favourite Hummingbird cake and a few laughs.

Current Commodties of Interest 23/04/13

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Current Interest

  • Mungbeans – Del. Goondiwindi or      X-Farm $1150 Sprouting (No GST) $1025 No1 Processing (No GST) RING US WITH      AN OFFER
  • 2013 Cotton – $433
  • 2014 Cotton – $435
  • ASW – Track & X-Farm
  • SOR 1 $238 – Del. Narrabri      Prompt, please show offers XF
  • SOR 1 NTL Track $274, Bris      Track $271

Chickpeas del Dubbo $500, del Downs $515

AgVantage Commodities Market Report 23/4/2013

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Overnight market traded lower, with profit taking in the  row crop contracts pulling all 3 Chicago markets lower. Soybeans  struggled with technical profit taking after the November contract broke down through the $12/bushel mark on an improved outlook for a rebound in supplies come the end of the year. Corn lost ground with export pace slowing, and an improved outlook for both US and Brazilian corn. Wheat followed suit, winter kill is still in the minds of most, but with maturity well behind, this could be masking or limiting damage. No one will really know until the pull the header out of the shed and start taking a bite into their harvest.

Cotton bucked the trend of the other major commodities showing limited gains. Volume was light ahead of first notice day on Wednesday (US) with most of the action already out of the way and everyone now on board the July contract, and the market paying full carry for the almost 500k of certified stocks. US planting remained behind the 5 year planting pace on limited moisture in most growing states. Mill interest continues to be limited for prompt/hand to mouth use, above the 85 USc/lb contract price.

The domestic feed grain market has kept the prices for ASW/70-10/Sorghum and Barley relatively firm whilst the US grain markets seemly moved around with limited clear direction. We have prompt demand for sorghum into Narrabri, along with delivered Newcastle, ASW/70-10 ex-farm and delivered in the track system or to the Liverpool Plains. Milling grades of wheat have been a little quieter, but reasonable prices are still floating around. New crop APW prices are being posted around the $270 port, but we are far from being inundated with enquiry about selling new crop with planting still yet to get a started for most.

The pulse market continues to sit around the $500/MT delivered Dubbo & $480’s/MT delivered Narrabri.  With growers continuing to sell at these levels, it is keeping a lid on the prices moving any higher. New crop hectare contracts are out and about at $450 – $460/MT delivered Darling Downs locations, but the crop is still a long way from being put in the ground.  Given the large number of tonnes of old crop held on farm, and the good conditions in Central Queensland these numbers should be considered . Domestic demand for faba beans has slipped away, new crop pricing is still not highly liquid as we get closer to the end of the planting window.

AgVantage Commodities Market Report 18/4/2013

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Grains were mixed overnight with May wheat up 0.25 cents after trading higher most of the day. Another freeze likely to spread across the western plains is causing some concern but due to maturation being well behind the usual pace there could be cosmetic damage not an outright kill. Damage from recent freezes won’t be realised for another 2-3 weeks. It is believed that wheat traded higher overnight due to short covering rather than new long positions. May corn closed down 2.75cents overnight and struggled to find support due to bull spreads, which supported new crop months. Continuing wet conditions will delay planting which did support the corn market. This issue pressured soybeans early and the November contract in particular, as any delay in corn planting could lead to an increase in soybean plantings. Beans were still trading lower through the mid session but exploded late to post 10.75 cent gains for the May contract. There is talk that this was mainly technically driven but also due to rumours that port workers in Brazil were going to strike but no confirmation of this.

Cotton posted gains of 100 points plus on both the May and July contracts. July closed up 123 points at 86.65cents/lb and as this is the month we are now pricing off, we have seen an $8/bale increase in price today. ECOM’s 2013 price today is $435/bale (subject to afternoon fluctuations in futures/currency). For anyone interested, we are bidding $431/bale today for 2014 crop and USD contracts are available also. Growers can elect to be paid into a US Dollar account if they have one or fix AUD at a later date, but must be fixed prior to being paid.

Sorghum is still sitting at similar levels to the past week. Track values are slightly higher today, XF and delivered Narrabri numbers are similar to yesterday. Sorghum traded this week at $231XF around Narrabri so please use the delivered numbers as a guide and if you have selling interest for prompt pick-up please bring us offers. We do have buyers working on May sales but at this stage it is difficult, as we explained in Tuesday’s report that locally, the wheat/sorg spread needs to widen for consumers to want sorghum and internationally, the US is providing our main customer Japan with cheaper product for June/July.

Demand remains strong for ASW in the system (only certain sites), APW and H2 Newcastle track, APW Brisbane track. We still have demand for AGP/ASW/70-10 wheat XF to work delivered LPP or XF. This week we have seen a jump in H2 values on a Newcastle track basis. Yesterday H2 traded at $292/mt Newcastle and APH was only $6/mt in front of this price. As a result, we saw growers selling H2 in the system.

We are still keen buyers of mungbeans both delivered Goondi and XF. Growers can commit a Multi-grade hectare contract (at the same values as fixed tonnage) with the following prices; Sprouting $1150/mt, No1 Processing $1025/mt, Processing $950/mt and Manufacturing $750/mt. There are grading/bagging costs to be deducted from this but please contact us if you wish to discuss in more detail.

Please keep in mind when comparing prices, AgVantage does NOT charge you, the grower, a commission. Any price we quote you is the price you receive. We can also complete online transfers on your behalf at your request, saving you time.

Some of you may have been experiencing some difficulties in viewing system stocks in the GrainTransact site recently. We have learned that this is due to upgrades from the Internet Explorer search engine. If you use Google Chrome or another engine (including iPhones or iPads) this does not occur. Apparently the upgrades have created incompatibility with GrainCorp’s online platform and they have technicians trying to rectify this.

AgVantage Commodities Market Report 16/4/2013

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Negative macro data and a rush away from commodities has resulted in sharp declines across the agricultural futures. The weaker than expected GDP data for the first quarter of the year coming out of China can be seen as the instigator for the decline in the market along with more weak data coming from the US. The resulting risk off attitude saw global sharemarkets slump, and significant drops for gold, silver, crude oil and copper. A silver lining to this is the Aussie dollar falling almost 3c over the past week to find itself close to $1.03, with the AUD being closely associated with economic performance in Asia and the fortunes of the commodity sectors. Ag commodities were not immune to the widespread liquidation, with wheat dropping 21USc to close at 693.6USc/bu. The fall in wheat was compounded by weather forecasts which indicate better precipitation for their yet to planted spring crop along with reducing concerns for the winter crop which is coming out of dormancy at the moment. Concerns do remain for the winter crop as it is susceptible to frost damage at this time. Corn lost 11.6USc to finish at 646.6USc/lb and soybeans 18USc at 1395USc/lb, with the better weather outlook also having an impact on new crop potential. It is also interesting to note that hedge funds are currently holding their most bearish position on agricultural commodities in several years, with net long positions in the market well below where they usually rest.

Cotton had losses of 134 USc in the May contract and 162 USc in the July contract, with the July closing at 86USc/lb. The cotton market is in the process of rolling from the May contract in to the July, with ECOM commodities anticipating the July contract to soften to similar levels as where the May contract is, around 84USc/lb. This is on top of losses over the course of the last fortnight which has seen prices steadily decrease from highs in the 90s. Weaker economic data out of the US and Europe has certainly had an effect on the demand side of the market, while mills continue to operate on a hand to mouth basis with purchases. The drop in the AUD should provide some cushioning to domestic prices holding around $430/bale.

Domestically, there is demand for any stocks of ASW to 70/10 grades of wheat either in the system or ex farm. Chickpeas delivered in to Dubbo at $500 also represents a good selling opportunity, with reports from buyers showing business being done in the trade at $490 DCT. This market has struggled to gain much momentum over the last few months and the potential for price increases going in to the Ramadan period being uncertain. New crop pricing has slightly increased to now hold at $450 delivered Downs for a hectare contract. Sorghum demand continues for April. We have a strong belief that once April/May positions are square traders will pullback buying as there is a large inverse in the market from April through to June/July. We’ve heard that US Milo is trading into Japan (our main destination) for August shipment at levels equivalent of $210-220 Newcastle track (parity), that’s $49-59/mt potential downside on the export market. We have been trying to price sorghum for June delivery and all buyers are unable to give bids due to the inverse, which is making sales for them very difficult to make, especially when Japan is sourcing much cheaper US grain. Although futures took a dive last night, sorghum values for April delivery into Narrabri and XF have remained at yesterdays levels. Demand into Narrabri is for April and limited to 1000-1500mt and because it is going into containers, it is a specific shipping period and not likely to extend through May. For anyone looking to price sorghum for prompt movement, please call our Goondi, Narrabri or Dubbo offices.

Current Commodities Interest 11/04/13

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Current Interest

  • Mungbeans – Del. Goondiwindi or      X-Farm $1150 Sprouting (No GST) $1025 No1 Processing (No GST) RING US WITH AN OFFER
  • ASW – Track & X-Farm
  • SOR 1 $233 – Del. Narrabri      (April)
  • SOR 1 $220 – X Farm around      Bellata
  • AUH/H2/APH – X-Farm

AgVantage Commodities Market Report 11/4/2013

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With the market still coming to grips with the Planting Intentions out on the eve of Easter, last night saw the second market moving USDA report in a fortnight released. Wheat finished down on an increase in US carryout of 16 million bushels and world ending stocks increased by 4 million metric tonnes. Corn was able to finish up, with coarse grains considered bullish for now, but an overall increase of 1.1 million metric tonnes was counted, with increases in Brazilian and the EU Corn, offset by deductions in Chinese sorghum, South Africa corn & Algerian barley. Soybeans closed marginally lower, ending stocks jumped up another 2 million metric tonnes, with demand in China slowing, and ample supply coming out of South America. Cotton finished up, still not trading the fundamentals with world ending stocks added another 1% to 82.5 million bales (45.6m of these in China).

Sorghum demand remains strong both track & XF. Demand is strong delivered Narrabri for April but it’s difficult to get a bid out of buyers for May/June/July delivery. We are hearing that bids through the trade are thin at the moment and at similar levels to track values for April delivery. Over the past week we have seen offers for May/June delivery but these offers haven’t been able to be converted into business booked as buyers are standing back and taking a ‘wait and see’ approach to June/July prices. System sorghum for April/May transfer today is at $272/mt Newcastle with 21 day end of week payment.

For growers  with late sorghum the difficulty with a late harvest this year will be two-fold. Firstly, moisture will most likely be an issue due to the shorter daily harvest period and weather. Secondly, any sorghum being harvested/marketed during this period will be competing against LPP sorghum going south/east and NNSW/SQ heading north. We’re not saying there won’t be demand but if growers closer to domestic destinations are actively selling they will be achieving higher prices due to the freight advantage, making it more difficult to try and extract those extra few dollars most seem to be constantly holding out for.

We are exploring more homes for late sorghum including Narrabri, potentially minimising or eliminating the risk of high moisture sorghum being rejected at more distant destinations. For anyone looking to enquire about June/July sorghum (XF, system or delivered) please give us a call.

We also have strong demand for mungbeans. With the smaller crop size this year, demand remains strong, as do prices. Today, we are looking at $1150/mt Sprouting, $1025/mt No1 Processing, $950/mt Processing and $750/mt Manufacturing delivered Goondiwindi. We believe these prices to be very competitive and have been actively buying mungbeans. Given the fragility of mungbeans, we would strongly recommend growers try not to double handle them.

Chickpeas have seen almost zero demand in the past few weeks. This week we have traded chickpeas at $500/mt delivered Dubbo and $490/mt delivered Narrabri for April delivery. Although chickpeas have traded at these levels, we believe demand to be still quite thin and demand into Dubbo is a lot stronger than Narrabri. Please contact us if you are interested in offering peas at these values.

Current Commodities of Interest 09/04/13

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Mungbeans – Del. Goondiwindi or X-Farm $1150 Sprouting (No GST) $1025 No1 Processing (No GST) RING US WITH AN OFFER

ASW – Track & X-Farm

SOR 1 $233 – Del. Narrabri (April)

SOR 1 $220 – X Farm around Bellata

AUH/H2/APH – X-Farm