Last week USDA WASDE report only confirmed the high global production potential for 2016-17, which sent the market into decline mode and with the $A advancing, added to the seasonal low pricing in the market. Lets hope that now those factors contributing to the decline are in the past and the market can recover some lost value. Today we have the $A lower at .7650, is a good start and with northern hemisphere winter crop harvest well advanced, harvest pressure is appearing to reduce and the global market is working through available quality of the crops. Lower pricing is finding international grower selling reluctance, so maybe we can see some upward price movement going forward. Any upward moves will need to be supported with production issues, with the first signs of dryness across Brazil reducing row crop and cotton plantings, and record yields for US crops in question. Global futures markets are mostly in carry, with only soybeans [CBT] inverse, on record yield potential.
Cotton bids were hit hard following the USDA report, with bids sub $500/bale, with a modest recovery seen from yesterday may see bids approach the $500/bale mark.
Domestic markets remain under pressure for old crop, with limited demand ahead of new crop, with buyers having mostly completed purchases through to last quarter of the year, the start of new crop harvest and having made solid purchases of new crop. Growers with warehouse grain in BHA will have until 30/9/2016 until increased monthly storage charges are applied, with new season starting 1/10/2016, may see ex farm grain delivered into the new season.
New crop multi-grade wheat is at $238/mt APW1 Newcastle NTP with grade spreads increasing on the lower grade. Fixed grade bids for the higher protein milling grades are holding a premium over the multi-grade option.
F1 is bid $188/mt Newcastle NTP with some premium for northern locations on NSW. Malt spreads are in the $10-$20/mt range. New crop sorghum is back at $215/mt NTP Newcastle. Canola NTP bids are firmer at $521/mt.
Chickpea bids for new crop continue to trend lower as grower selling increases. The export market continues to reflect need for early product, Newcastle NTP is bid $800/mt October – November with the December price back $60/mt. Delivered packer bids eased $10/mt over the week, across all regions and delivery periods. Fababean buyer interest has improved with delivered packer bids at $300/mt for new crop.
Old crop demand remains hand to mouth, with limited demand for all grains. Old crop chickpeas demand remains limited with demand into Downs markets the best option.
Overnight US futures found some upside after setting contract and 10 year lows on some commodities. While Northern hemisphere harvest continues to pressure storages, quality issues continue to gain some traction. KBT is back to a premium to CBT, reflecting a change in global needs for quality milling wheats. Reports have lowest French crop in 30 years and imports of food quality wheats are being purchased. In a market drenched with bearish supply information, any disruptions and demand is viewed as positive for firmer prices. The discovery of GMO wheat in Western US White Wheat may disrupt Japanese and South Korean purchases from the US. The global feed grain complex will find extra weight from the volume of lower grade wheat, but will find some support from a poor safrina crop in Brazil, with imports of GMO US corn on the table. Further upside to the markets in the longer term could come from the economic and political instability across South America and the usual weather events around the world.
Canola looks like having some support from EU production issues, but will be working hard to compete against favourable US and South American soybean crops.
Cotton continues to hold above $530 as weather concerns for India and Southern US provide enough supply support to the market, while lower clearance rates of Chinese auctions may just temper nearby market values.
The Indian Government has updated its 15/16 pulse production, lowering from the previous estimate .59mmt to 16.47 mmt with the previous years production of 17.15 mmt. While lower, market impact will be minor as the market looks to current new crop supplies. Product substitution may reduce desi chickpea demand into the sub continent as lower cost supplies of yellow peas are hitting the market from EU and Black Sea origins with Canadian supplies yet to kick in. The latest update by Australia Pulse for a 1.72 mmt of desi chickpeas is ambitious, with an estimated area of 1.07 m ha planted unlikely to be all harvested. Prices for Chickpeas and pulses in general have fell, with chickpeas bids back $100+/mt for fixed tonnes over the past week and back $170/mt from the season high. Fababean, lupin and mungbeans bids are all lower with limited interest for the winter pulses from buyers. Grain demand remains hand to mouth with season low prices making hard work to clear stocks ahead of new crop harvest, while limited opportunities do become available from time to time.
Warehoused 15/16 winter crop grain will start to attract additional carry charges, if taken into the next season. Contact your storage agent for when this starts for your local silo.
New crop multi-grade wheat is bid $243/mt,DR1 $325, F1 $195/mt, Chickpeas $820/mt and Canola $510/mt all NTP Newcastle. Chickpeas holding just above $800/mt delivered Narrabri packer, and fababeans at $300/mt, with #2 discounted $15/mt and Doza variety $15/mt.
Albus Lupin markets for old and new crop are not attracting any bids.Fieldpea interest is limited to domestic markets.