Both Rob & Sam have new additions coming soon (keep an eye out in future news posts for the announcements) making a total of 9 between us.
Erin’s kids, George, Martha & Elsie also got into the spirit of the day.
Chris, Rob, Brooke & Steve were captured at the Mallawaa track by the lovely Shanna Whan. Check out more of her photos of the day at http://skwimagesandfreelance.myfotojournal.com/2013/jun/09/bright-sunny-mallawa-picnics/.
Keep an eye out over the next few months for some more pics from Shanna as we update the website photos.
Unfortunately we have no photos of the glorious day at Talmoi. Photography plans were noisily derailed by a run in between a door and a 4 yr old resulting in chief Talmoi photographer, Brooke and Baxter spending the day at home all dressed up with no where to go. We did however capture a photo before the accident with Baxter pleased as punch to be dressing just like Dad.
Cotton fell heavily overnight and fundamentals are still bearish. From a historical perspective, futures at current levels aren’t too bad and if your view is we have more to gain from a declining AUD, ECOM are offering USD contracts whereby you can fix currency prior to bales allocated against the contract. Our price today is $470 for 2013 crop and $465 for 2014. ECOM are happy to look at balance of crop –type contracts for 2013 season.
Sorghum continues to remain strong with $300+ delivered Narrabri today. We are becoming limited with the amount of high moisture we can take into Narrabri as there is a lack of in-spec grain being delivered to maintain stack averages. Access to dryers is very limited and will very quickly become an issue for growers who are still unable to harvest due to continuing high moisture. Small falls of rain this week have only further stalled harvest, especially north of Narrabri. We do have demand for sorghum up to 14.5% moisture from the LPP region, please contact us if you are interested in pricing.
Old crop faba bean demand is minimal due to lack of stocks. New crop values are still around $340-350XF depending on location. This is for No 2 faba beans or better and feeding into the domestic market. These prices are baffling export traders as the delivered packer value for No 1 quality is at or below these prices with a $15-20/mt discount for No 2 quality.
New crop wheat has been of interest over the past two weeks with reasonable buyer demand and some grower selling as values have steadied around $288-292/mt track. We have a variety of contracts available and we will do a comparison of products and determine what is best suited to your requirements. For example, NNSW/border region growers may focus on APW/ASW spreads and possibly earlier delivery periods, others will focus more on an APH spread, quicker payment terms or the discount to feed. We have the ability to fix spreads or leave them floating, we can also fix a price at site so if GTA location differentials change for the 2013/2014 season you will not be affected. Some counterparties are also paying premiums for certain sites, so before making a decision, please call us.
Last night saw most major commodities take a hit other than beans. Markets are retreating from commodities and equities in favour of other investments. July wheat finished down 19c to 679c/bushel on favourable harvest pace and news of increased yields in the Eastern States of the US. Expectations that Kansas production could be up by as much as 20 million bushels and weaker European markets has added to downward pressure. Corn also finished down 8 ½ c to 653 ¼ c/bushel on more a favourable weather forecast and slowing outside markets with exports slowing this week to the slowest shipping in the past 5 months. Beans bucked the trend finishing up 18 ¾ c to 1512c/bushel with strong basis levels in processor markets and increased export inspections. Areas in the NW corn belt remain extremely wet, which could mean there is an increasing amount of acreage that will go unplanted added support to new crop.
Cotton futures overnight were down again. The December 13 contract fell 146 points and finished at 83.18 while May 14 dropped 106 points to settle at 82.50US cents/pound. The outlook for cotton futures through the trade desk is downside to 82 cents, however AUD forecast to fall into the 80 cent range in the next 4-6 weeks. On the back of this we feel growers should consider pricing in USD and fixing AUD on further downside. ECOM are currently looking at balance of crop contracts in the form of a fixed bale contract with 10% tolerance on deliveries for contracts less than 500 bales. BOC’s above 500 bales will be limited to a 5% tolerance. We are also looking at unfixed price agreements whereby growers can commit bales, have cotton ginned and allocated to a merchant and you have until 6th November to price these bales. We can also look at market orders, on a day order or a ‘Good Till Cancelled’ basis. For anyone wanting to discuss marketing alternatives for your cotton crop, please give us a call.
In other domestic news we have seen a slight softening in most grains, though feed wheat demand remains relatively strong holding up basis. New crop wheat prices have been +$280 NTL /BNE track but with recent losses in the market we have seen this drop into the mid $270’s. Sorghum remains in high demand with prices above $300 delivered Narrabri and $350 Delivered Brisbane. These prices represent good value considering the spread to ASW/APW is only $1. We continue to have homes for slightly out of spec Sorghum with regard moisture. Please call us to assist in finding you a solution.
The grains complex was active overnight, ahead of the crop progress report which was released following the closing bell. All Chicago commodities faced some profit taking ahead of the report, but the bearish expectations of the majority of crops being more the 50% good to excellent pressured the new crop months lower. Wheat contracts were supported by continued delays in crop development and harvest, and continued demand domestically and internationally for feed wheat. South Korea has tendered for 140kmt of feed, which the US is expected to pick-up, whilst the rumour mill runs that China may again be on the lookout for more Chicago style – soft red winter wheat. Soybeans planting came in marginally better than expected, with plantings increasing 14% week on week, to 85% of the crop in the ground. 64% of the planted crop is considered good to excellent, helping to pressure the new crop November contract lower. South American farmers have slowed their sales pace, which is helping to support the front month. Old crop corn rallied with continued export demand, tight US stocks and growers in Argentina going on a corn sales strike, which may force delays and more export pressure onto the States. Most of the new crop in the US is in a reasonable condition, with 62% of the crop rated good to excellent.
The cotton market began this week, in a vastly different fashion to last weeks rally into the low 90’s USc/lb futures price. The July contract traded limit down, following a 200pt plunge during our afternoon yesterday. The volatility in the market has been linked to the expiry of options last Friday. The market has returned to carry, after the squeeze on July came to its abrupt holt overnight. 97% of the US crop is in the ground, with 43% considered good to excellent. All eyes are on Texas, where if decent rain doesn’t fall by the end of the week, up to 20% of the crop could be ploughed out only weeks after planting.
The Aussie dollar has lost some of the steam from last week, falling almost 1.5c since this time yesterday. The Aussie remains highly volatile, and will most likely remain like this for the foreseeable future. The RBA was set to release the minutes of its last meeting today at 11.30am, whilst the US Fed are meeting this week, with all eyes looking for further direction from Mr Bernanke with regards to the tapering of the qualitative easing program.
Domestically, new crop wheat has come under pressure from the improved conditions in the parts of the state that have been able to get a crop in the ground. Old crop prices remain strong for all grades the feed market happily continuing to flat price anything in the system and on-farm that meets their minimum70kg/hl test weight, & maximum 10% screenings requirement. Current crop sorghum is still in high demand, delivered Brisbane, Newcastle track, and destinations along with the packers in Narrabri. We are still able to handle sorghum outside of spec for moisture, and we have buyers now looking at the possibilities of downgraded sorghum coming to market given the weather of the past month or so. Old crop Chickpea prices remain fairly stagnant, with subcontinent demand having dropped off, and a new crop which is now around the corner keeping prices under wraps. We have had interest in new crop faba’s at around the $340’s ex-farm level. The end of the month, and financial year is upon us, if you have a parcel that you would like to price, please do not hesitate to contact the office.
Futures markets for all major commodities were down overnight following the release of the June USDA report. Wheat finished down 13 ¾ at 683 c/bu with traders bearish against the 13/14 USDA crop estimates. Traders had expectation 19 million bushel less than the report. An estimated cut of 5 million tonne to world ending stocks, which was larger than expected, adding only short term support. The July contract for soybeans finished up slighted but the November contract finished down sharply 12 ¾ to 1314 ¼ c/bu, the USDA report was considered neutral for beans with no change to estimated ending stocks for 13/14 from the May report. Many traders thought yield estimates would be adjusted lower due to late planting which was considered bearish on the market. Corn finished down 13 ¼ to 537 ½ c/bu with ethanol usage down week on week. The USDA report saw traders bearish as they had US ending stocks pegged approximately 250,000 bushels below the USDA report. Planted acreage was left unchanged but yield was adjusted down. Cotton moved sharply up overnight 289 points to 88.07 c/lb breaking through the top side of its trading range on the back of the USDA report confirming market concerns of US Cotton supplies. The USDA estimate has reduced planted acreage by 300,000 acres and US ending stocks have been trimmed by 400,000 bales to 3.6 million bales. Though sentiment, is that the USDA report did nothing for the global balance sheet, with China holding inventory far greater than their annual usage.
Domestically, we have seen old crop wheat values remain relatively unchanged during the week with basis remaining firm. We are seeing strong values for ASW/APW/H2 in the system at mainline sites of around $325 Newcastle, which equates to Moree $277, Narrabri $285.50, Gunnedah $293. Please call us with any parcels of this grade in any site or ex-farm. With more rain throughout the region, reports are starting to talk of improved wheat production into the coming season. Old crop represents good value compared to current new crop. New crop wheat the past week has traded up to $286/mt Newcastle with some selling activity in both Newcastle and Brisbane port-zones. Global production is looking at a large 2013/2014 crop in all major growing regions. We believe growers should be considering selling some new crop multi grade wheat at levels above $280 port. Sorghum harvest has almost come to a stand still, with rain and poor harvesting days. There is still continued demand for Sorghum with prices hitting $295 delivered Narrabri & $330 delivered Brisbane. If you have Sorghum within spec please call us with an offer. We do have homes for high moisture (15% max)Sorghum at a discount of approx. $10/Tonne. New crop chickpea values have been around $445-450/mt delivered Narrabri which historically are pretty reasonable numbers. Faba beans for Oct/Nov pick-up are $340/mt XF Narrabri/Wee Waa/Cryon for No. 2’s or better and $330XF Garah/Weemelah again for No. 2’s or better. We have seen domestic cotton prices rally during the week hitting $485 for current crop and reaching $490 for new crop, with futures prices rallying some 200 points overnight and currency settling in at 0.94 cents. The market has been extremely volatile over the past 2 weeks, and we would consider placing market orders at $490-$500/bale.
Grains futures overnight were down across the board with December wheat closing down 5.5 cents at 713.75 cents/bushel. Strong export inspections, good crop prospects in EU and the Black Sea region and positioning ahead of this week’s USDA Report all added to the sell-off in wheat. December corn closed down 12.5 cents on the back of good growing conditions in the US despite the slow planting pace which is at the slowest pace since 1995/96 season. Soybeans also lost 11.25 cents on the November contract due to favourable weather over the next week with warmer weather and a few scattered showers which are seen to be beneficial.
Cotton led the charge overnight with the December contract up 70 points to close at 0.8588 US cents/pound. Technically, a close above 0.8650 would set-up the December contract to test the 89 cent highs that were hit back in March. The USDA weekly crop conditions were posted this week for the first time and 42% of the US cotton crop is rated good to excellent, down 9 percentage points from last year, and 21% of the crop is poor to very poor, up from 13% last year. Today, ECOM are paying $480/bale for both 2013 and 2014 crop. We are also taking market orders as overnight markets combined with AUD movements can trigger these levels while we are sleeping soundly!
Domestically, basis remains firm on old crop wheat with minimal change in values. We have strong buying demand for all grades of wheat, from lower-grades through to high protein and even screenings wheat. New crop wheat the past week has traded up to $286/mt Newcastle with some selling activity in both Newcastle and Brisbane port-zones. We believe growers should be considering selling some new crop multi grade wheat at levels above $280 port. This would equate to APW at Narrabri to $240, Moree $232, Burren $232, Walgett $224, Goondiwindi $245, Coonamble $234 & Trangie $236. You could then look to add conservatively $10 to H2 & $20 to APH2. We have a range of new crop contracts available from floating spreads, fixed spreads, a milling grade only contract and we are also able to lock in site prices. The global wheat balance sheet is pretty loose at the moment and with EU and the Black Sea regions staring at a very large 2013/2014 crop, there isn’t too much concern regarding the struggling US crop at the moment. Ukraine production for 2013/2014 is expected to be in excess of 20 million tonnes compared to 15.8 million tonnes last year and there is no export limits for the first half of the marketing year as a result of this comfortable production forecast.
New crop chickpea values have been around $445-450/mt delivered Narrabri which historically are pretty reasonable numbers. Faba beans for Oct/Nov pick-up are $340/mt XF Narrabri/Wee Waa/Cryon for No. 2’s or better and $330XF Garah/Weemelah again for No. 2’s or better.
Sorghum harvest is progressing ever so slowly due to high moisture. What this crop needs is 2-3 good frosts and a few sunny harvesting days. We just can’t seem to get them and growers are struggling to get started without having to resort to drying grain. We are seeing sorghum as high as 18% moisture being harvested and getting dried down to fulfil existing contracts. We have strong demand for sorghum delivered Brisbane, Narrabri and system. XF parcels on the LPP are more limited due to a weak domestic demand and a preference for wheat in feed rations. We do have homes for higher moisture sorghum but this is probably limited to a maximum of 14.5%-15% at the moment. With more rain forecast this week, it is becoming increasingly frustrating for those trying to harvest.
The front months of the futures market overnight jostled for position as we close in on first notice day in the grain space, whilst the new crop contract all took a clear direction, moving lower. Ethanol production remains support positive, along with the expectation of a lower final corn plant, while improved production in Europe, and South America give the bears something to crow about. Soybeans ran a similar course, new crop declined on expectations of additional acres heading to soy after missing the corn planting window, and sales of 12/13 crop being cancelled or rolled into the 13/14 marketing year. Wheat followed its two Chicago counterparts, the Monsanto/GMO wheat situation continues to be heavily focused on, whilst a number of analysts have turned their attention to working out production ahead of the USDA report out next week.
Cotton gave back a portion of the 500pt rally of the last 2 sessions, closing 105 pts lower for the July contract. Carry in the market has slipped back to around 120pts, from the nearly 300pts of late last week. Open interest remains high, given the limited number of days prior to first notice day. Talk of a squeeze, along with a merchant maybe readying to take all the cert bales off the board, leaving the door open for some volatile market moves over the next couple of sessions. Ecom today is bidding $470 for 13 crop, $475 for 14 crop. We are happy too work market orders for both your remaining 13 crop bales and forward sales of 14 crop for clients.
The Aussie dollar came under more pressure overnight and early this morning, with reasonable data coming out of Europe, lifting both the Euro and British Pound, while US equity markets have come under pressure as the greenback strengthens. A new 12 month low was made this morning, at 0.9468
Domestically, the wheat market is leaving no stone unturned as prices continue to rally as merchants continue to fill open positions in the feed markets, where wheat under APH is being flat priced to fulfil requirements. Sorghum is in demand for prompt delivery, both ex-farm and in the system, our homes for high moisture are filling up, call us with your spec’s and we will try and find you a home. The old crop pulse market has headed into the doldrums, with word that the middle east and subcontinent are awash with pulse grains. New crop wheat prices have stayed firm, even after the rain event of last weekend which will surely help those able to plant a crop for this season.
The Aussie Dollar rallied overnight almost a full cent to back over 0.97USC on the fact that weak US manufacturing data made traders think again about the Fed tapering QE. We are seeing a strange scenario where negative economic data is actually positive for US equity markets and bullish for our dollar against the greenback as it should see QE support continue. All eyes will be on the RBA rate decision today at 2:30pm where the consensus is that rates will remain on hold. A surprise cut should see the Aussie fall sharply which will be good for Australian exporters.
A softer US dollar is generally positive for dollar-denominated commodity futures values as they become more affordable as exports, however the resulting higher AUD value usually limit gains domestically. The cotton market had the largest move overnight, reversing 9 straight sessions of losses to gain 226 points, closing at 84.32 USc/lb on the December contract. Support in the cotton market has come from improved data coming out of China, while the State buying reserve continues to underpin the market. Production in the US are also coming to the fore, with heavy rains likely to reduce production in the high yielding Delta region. Wheat also made slight gains of 3 USc to close at 708 USc/bu, despite improving growing conditions in Europe, the Black Sea region along with Australia, while corn lost 5.5 SUc to drop to 656.5 USc/bu, resulting from weak demand for old crop stocks and conditions looking better for a large new crop.
Domestically, decent rainfalls were seen across large areas of NSW and QLD, with the largest falls coming down in the South of NSW which managed to clock up a couple of inches. There was increased planting activity over the last week in anticipation of falls, and expect things to pick up again once the ground dries out. New crop wheat continues to maintain respectable levels in the mid $280s track, and is struggling to push above $290 over the last few weeks. Other new crop numbers of note are canola, which has seen an impressive rise over the last few weeks to be posting numbers above $570 Newcastle track, while we have seen bids for faba beans at $340 ex farm Narrabri area for No. 2 grade or better. Old crop stocks continue to be in strong demand wherever they can be found. We also have homes for sorghum which is coming off with borderline moisture, with recent prices in to Narrabri offering a $5 discount for moisture up to 14.5%.