AgVantage Commodities Market Report 26/07/2018

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Fun Fact: Once a year, a majority of the great white population migrate on a sort of vacation, roughly 20 percent of the Great Whites head out to a dead spot in the middle of the Pacific Ocean. Nicknamed the “Great White Cafe” by researchers who discovered the strange behaviour, the reason is still almost a complete mystery, myths include hunting of the monstrous Giant Squid, only adding to the mysteries of the great unknown.

July is all but done, though August appears to be no change from what is forecasted. The urgency for feed grains couldn’t be more evident with logistics being the least of worries for buyers. Cottonseed, Oats, Fabas, Corn, Wheat, Barley and Sorghum being hauled across all corners of Eastern Australia for graziers and lot feeders with dwindling supplies as the dry winter doesn’t seem to have an end in sight. Grains through the Downs are still in stock but from the border south, grain is being acquired from the MacIntrye for delivery on to the plains and vice versa (SNSW to the North of the state).

Chickpeas have found some ground as of late with word coming from the sub-continent that their own values are on the up. $655 across Narrabri and the Downs with new crop at just five dollars more. The next few months will tell all as international demand creeps up and old crop tonnes are well sought after. The season obviously will be quite miniscule which will slowly start to reflect prices once word travels abroad that conditions are a lot worse than they first thought. This is also coming of smaller seasons already in previous years.

Cotton has had smooth gains in to the end of the week. General though is that supply is lagging in regards to the demand, especially with the USDA delving in to the world estimates more and more. Dry weather throughout Australia and the US growing areas continues to play its role in only elevating market futures.

AgVantage Commodities Market Report 19/07/2018

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Fact of the Day – A cave in France has the footprints of an 8 to 10-year-old boy left in the mud 26,000 years ago alongside the paw prints of either a wolf or a large dog, this is the oldest evidence of human/canine relationships ever found.

August looms with now only six weeks remaining of winter, and with how the season is progressing spring is still looking to do anything but its traditional role. Looking overseas, if anyone was watching the World Cup Final other than the French celebrating, you would have noticed the torrential rain being cast over Moscow and the prime growing areas of Russia and the Ukraine. This belated weather event has cast some shadow over how the old soviet nations quality will fair come harvest time this season. The overseas markets including the CBOT and ICE have catered to the USDA’s WASDE report on the downgrading global Wheat production. The estimates cut about 8.5 million tonnes with majority being the EU followed by Russia, with Australia’s production output being dropped by 2 million tonnes. Now as this is only a forecast, it still has a degree of confidence when looking at the climatic conditions being faced across the southern and northern hemispheres. In regards to the ongoing trade war between the two superpowers, not much more has eventuated, though all markets are keeping one eye on its progress throughout the week (especially after Trump and Putin had a sit down in Helsinki). The Aussie dollar against the greenback has dropped by half a cent and opened today at $0.737

Spot loads continue to drive current demand with Wheat, Oats, Fabas, Corn and Barley being of main focus for feed rationing for stock. Barley is wanted but not as much as seller prices indicate, hence other feed grain avenues being much more prevalently followed. With the Darling Downs supply quite healthy from the port deliveries (considering the current weather and feed situation), this was only a short term fix. Feed Wheat and Barley delivered Downs and XF still is bid around the $400 level, though local feedlots are chasing cover for the remainder of winter and providing premium bids to secure tonnes sooner rather than later. Across the North West, demand for graziers inventory is becoming harder to source without spending a little more coin week in week out and the outlook is of course not promising as usual. On the pulse front no change for Chickpeas, with old and new crop set at $630/mt in to Narrabri and the Downs with a $10-20 discount out of warehousing. $500 ex-farm is still the minimum price sellers will take for feed Fabas with delivered prices increasing dependant on location.

The most recent USDA report has decreased the forecast for US production this year, this has given the Cotton futures a boost across the board. Weather concerns in the Texas panhandle and Australian growing areas also continue to play its role in where merchants are setting their basis. This week pricing has jumped at an amount of $15-20 for the next two seasons, with less interest beyond 2020. Today’s prices, $640 for 2018, $650 2019, $610 2020 and $530/bale for 2021 and 2022(at time of writing).

AgVantage Commodities Market Report 12/07/2018

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Fact of the Day – Only three athletes in the world are in the same exuberant pay bracket whom are also considered the greatest of all time in their respective codes. In the last fortnight all three have recently made massive plays on their futures. Lebron James moved to the LA Lakers (NBA) for $204 million (AUD) over four years, Roger Federer (Tennis) changed sponsorship from Nike to Uniqlo for $404 million over 10 years and Cristiano Ronaldo (Soccer) has left Real Madrid to play for Juventus for $189 million as well for four years.

The bitter cold has made a return with the mercury dipping below zero most days this week with not much change heading in to next week and the rest of July. Growers north east of Moree have had a considerable amount of germination but as we head further south the outlook only gets bleaker. Market demand is still being stoked by domestic needs as the Brisbane and Downs’s market zones are being well supplied by the ships still rolling in to port. This has capped the market for now and whilst this supply is available, the trade demand continues to be low for North West stock due to freight and logistics taking its toll on grower selling targets. The US looks set to publicize an additional $200 Billion in tariffs to China. This is an intensification of the trade warfare amongst the countries, with Chinese tit-for-tat tariffs probable, the AUD underwent a fall on this news as worldwide trade uncertainties weighed on the Aussie currency. The dollar still holds its own at $0.747at today’s market open. Season uncertainty for Australia and parts of Europe for consecutive years has created some futures talk but the supply out of the black sea seems to be keeping everything at bay….for now.

Feed grains across the board are still sought after though predominately being used locally for graziers and lot feeders. Oats, corn and straw are also more prevalent as of late if nutrition is up to the standard as a replacement of the more expensive grains. Sorghum is still a little soft though interest in to Tamworth at $363 and Downs $360/mt is keeping growers busy trickling out larger parcels of remaining stock. Faba beans are at $500 XF with Chickpeas for delivery in to Narrabri and the Downs bid $630 July/August. The trade war is playing a part in the current state of cotton futures, though as the week has progressed bale prices have made a steady climb for current crop and the seasons ahead until there was a drop at open of Wednesday morning US time. Today’s prices are at $625 for 2018, $625 2019, $595 2020 and $525/bale for 2021 and 2022(at time of writing).

AgVantage Commodities Market Report 5/07/2018

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Fact of the Day – Fourth of July fireworks are a large part of the tradition of celebrating this national holiday, in 2012 the U.S. imported $227.3 million worth of fireworks from China. Barbecuing is also big on Independence Day, approximately 150 million hot dogs and 700 million pounds of chicken are consumed on this day.

Exactly a week ago I stated that “We do not know what to believe when talking forecasts. Even though they prove beneficial for future planning, as of late there has not been one iota of accuracy, and rain can now only be perceived as evident when in the gauge”, now this is exactly what has occurred and growers banking on this outrageous forecast are back to square one. Where we sit now is a chance/risk of early germination, frost damage and/or just no follow up moisture in these now crucial developmental stages. Narrabri received about 7-10mm all up with not much more around the surrounding areas, though there was substantial drops of 20-40mm in the Central West and Darling Downs which is promising for those growers for the season ahead. Stateside the winter harvest is about half way through and on the good to excellent side. The markets (CBOT, ICE) we expect to be quite subdued for the remainder of the week due to Independence Day celebrations (4th of July) which are set to roll in to the weekend. All eyes for this week look to Friday with this the deadline for the Mexican standoff of tariffs between China and the US.

The feed market is still kicking along smoothly with demand across the North West and Southern Downs mainly being catered too by local grain from down the road. Trader demand still look to secure tonnes, though cannot compete with the selling interest when factoring in costs and logistics in to their own sites. Rain across the Downs, softened bids by $2-5/mt though nothing drastic as other prime growing areas received next to nil. Chickpea prices have come back from their $680/mt highs seen over the past few weeks, mostly due to trade teams prepping for the ‘apparent’ rain. Delivered Downs and Narrabri for old and new crop is bid at $630 July/August. Faba’s still aren’t being moved for anything less than $500 ex-farm and there is really nothing to show why it won’t slowly increase as the dry weeks continue to roll by.

Cotton has had a fluctuating week, prices climbed before just softening in preparation for more information on the trades being negotiated on by the Chinese and Trump. The futures have come off and shippers are waiting for the import quotas to be released for Chinese Mills. The next two weeks will be quite telling on where the season’s ahead bale prices will sit. Today’s prices are at $610 for 2018, $620 2019, $590 2020 and $525/bale for 2021 and 2022(at time of writing). Currencies are also dancing a fine line on what this Friday will bring, the Aussie is staying relatively calm at $0.740.

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