Fact of the Day – He gripped a tennis racquet for the first time when he was just four years old. Therefore, it’s no surprise Novak Djokovic has just won his 7th Australian open and 15th Grand Slam title at the age of 31.
With the US government shutdown now at an end, this allows the USDA the freedom to finally report on the global estimates and supply on February 8th after a long hiatus. This information will be critical as it will feed the trade on the progression of global agri-commodities over the last two months as they have since been reporting with minimal data to go off. Whilst we wait on the WASDE report next month, weather has been the main focus over the US, extreme cold and unseasonable heat looks set to hit the winter wheat causing some significant plant demise if as serious as forecasted.
Sorghum demand is rampant as more and more starts to be stripped from Narrabri heading north. High screenings and low-test weights continue to be a disappointing factor in an already dismal season, though the demand still remains. Narrabri to Moree areas are bid at $345-$350 ex-farm (less $15-20/mt for SOR2), with delivery options also available. Buyers are also looking for Sorghum cover out to April and May. Delivered Newcastle market zone is bid at $395, though it is very much a sellers’ market as later planted crops look only to be more scarce quality wise, bringing more focus to the current grain coming off. Domestic demand against export demand is very much the same, though the export market will continue to watch closely at China’s demand for sorghum and their current uneasy trade talks with Trump. With sorghum, we will also see a lot of straw and hay being cut and baled, this with the continued market demand for roughage by feedlots and graziers will be another cost-effective avenue some poor performing crops can take advantage from.
Cotton futures made modest gains before the long weekend and have really seen no change since the start of the week. There is still high demand for bales, though production uncertainty is a major factor for growers as the risk of more forward selling is just too much of a gamble at this dry time. 2019 bales have been trading at $600 over the past fortnight. Prices today for seasons ahead now stand at 2019 $590, 2020$590 and 2021 $550(at time of writing).
Fact of the Day – The NFL’s popularity is even more remarkable when you inspect the fare it has to offer each week on television. An average professional football game lasts 3 hours and 12 minutes, but if you tally up the time when the ball is in play, the action amounts to a mere 11 minutes, earning the star players upwards of $1.5 Million per game.
To start the week international markets were subdued as the US celebrated Martin Luther King Jr. day. Since the initial Trump/Jinping talks late last year, the respective economies as well as invested others, have been keeping a close eye on when possible purchases of US agri-commodities would occur. There has been murmurs this week on wheat and cotton, though only time will tell on how this will affect world trades in coming days. Though it is also said that the US has declined an invitation from China for preparatory trade talks. Across the Bering sea, Russia is rumored to be taking a forward step on their domestic demand in a bid to establish better market parameters. The Aussie dollar dropped over night to $0.713 on the back of Chinese market uncertainty.
January’s only saving grace around NNSW and SQ has been the late evening summer storms. Even though temperatures still push the envelope at the 40-degree mark, some decent falls have been received to give the slightest encouragement to already struggling crops. Domestic users and exporters are itching to know more about early sorghum being harvested, as securing tonnes is crucial considering the minimal production across the eastern states. Pricing on the sorghum front remains firm, especially with the continued heat taking its toll on the later planted paddocks. For delivery $365 Downs, $380 Brisbane MZ and $385 Newcastle MZ are of continued interest. Though the domestic demand has seen ex-farm prices become more enticing also at $345 Narrabri/Moree area and $355-60 XF Liverpool plains for April. Test weight and yields continue to be a worry, though bigger concern is for later planted sorghum, as it just doesn’t seem possible for it to hold on for 2-3 more weeks of current conditions.
On a feed market note, there has been a continued increase in interest in niche alternatives for stock nutrition. Palm expeller, Lupins, Canola meal, Oats, Beans and Maize have all been sought to reduce the impact of high feed prices, but also to gain as much nutritional value as possible to maintain livestock quality in these dire times. Not too much to say on Chickpeas this week, traditionally January is a quiet time, and this year is no different. Pricing dropped to start 2019 by about $20-$25/mt sitting at $650, though we expect to see activity improve over the Feb/March period as reports continue to outline poor crops in Pakistan, Bangladesh and Middle east.
The government shutdown in the states has really slowed down the global economy on multiple fronts. When talking cotton, the closure of the government reduces how much global supply data the market has access to, generating a degree of uncertainty. Therefore, the sooner it ends, the sooner we possibly can see some positive changes. Crops here at home are under immense pressure from the weather producing relentless winds, hail storms, and heat to go hand in hand with irrigators possibly not having enough waters left to finish the season adequately. Prices today for seasons ahead now stand at 2019 $590, 2020 $590 and 2021 $550(at time of writing).
Fact of the Day – For the 2019 Australian open, the top three seeded men’s players are unchanged from the 2009 open, the three champions being Roger Federer, Rafael Nadal and Novak Djokovic.
The heat in the last week, as well in the coming days is taking its toll on everything, with the pressure the crops are under more than evident. With the North West and Southern Downs facing 5-6 days over 40 degrees, there hasn’t been, nor will there be, any respite as we approach the end of January. What we are facing is historically no different to any other start to the year, though the main factor is that the region has not received sufficient rain in over a year to be able to tolerate the harsh summer conditions. Sorghum pricing continues to firm day by day, with the main driver being the production uncertainty, paired with current temperatures. Delivered in to Brisbane/Downs prices sit at $375/$365 with ex-farm bids floating at $335-$345 dependent on location, mostly around the border regions that are set to harvest soon, if not already. Early reports of quality seem to be a little light, as we didn’t receive the final finishing rain, some crops are looking to float between sorghum 1 and 2, though this will be more telling as more growers get in to the paddock.
Domestic demand around the Darling Downs is becoming a little thinly stretched as there continues to be delays coming out of the western ports, for now the short-term fix is pulling grain up from NNSW and having to pay a heightened price from where the market stood at the end of last year. Feed wheat on farm is bid between $445-455 dependent on location. Nothing exciting has really changed in the last week on the cotton front, except the pace plants are deteriorating in this scorching heat. As well even though the super powers of the world have been talking, there has still been no beneficial outcome worked out yet regarding workable trade agreements. Prices today for seasons ahead now stand at 2019 $585 and 2020 $585 (at time of writing).
Fact of the Day – With news of his recovery, the man himself Michael Schumacher is the only driver to ever win seven F1Championships, five of which he won consecutively. According to the official Formula One website, Schumacher was “statistically the greatest driver the sport has ever seen” at the time of his retirement from the sport.
2019 has picked up exactly where 2018 left off, hot, dry and windy, the mercury is also forecasted to sit above 36 degrees for at least the next 10 days. The heat will not so much affect the sorghum looking to come off this month, but more the areas that were planted over the late November/December period. Rain obviously isn’t imminent and as you drive around, dryland cotton and sorghum seem to be putting up their last stand in this heated fight. Domestic grain demand is still very much rampant as buyers looking now for coverage through to April, prices also have firmed with port delays in the west holding up shipments in to Brisbane, thus creating a slight short of feed grains around the Darling Downs Market zone. International news has been quite dormant over the last three weeks, this can be put down to market closures, festive period and as well the elephant sitting in the states, the US government shutdown. The “Mexican standoff” and shutdown looks to end soon, though US-China talks are also underway, with president Trump tweeting earlier this week “Talks with China are going very well” so this could see a well needed market spike to get the year back on track.
Prompt sorghum for January and February is very much a sellers’ market, as buyers look to secure tonnes immediately. Delivered in to Brisbane/Downs prices sit at $370/$355 with ex-farm bids estimated at $330-$340 dependant on location around the Moree and Goondiwindi areas. Feed wheat is comfortably sitting at $445 XF Narrabri north, with shorts evident coming out of 2018 and F1 barley is $25-35/mt lower than wheat. Chickpeas are still quiet, and January has always been traditionally calm before the buying storm. With the sub-continent and surrounding countries crops not faring well either, we expect to see heightened demand come Feb/March. I do believe the next 4-6 weeks will be telling as the Islamic nations look to stockpile before their fasting (Ramadan) at the beginning of May, as well as their yields nowhere near meeting expectations. Hopefully 2019 brings positive light to a pulse market that has been dark for near 18 months. For now, the Downs market zone is bid at $890 for new crop and Narrabri $875/mt.
Cotton is and has been quite dismal to say the least to start the new year, prices here at home have dropped away by about $25/bale since Christmas. America’s government troubles haven’t been helping, though as said previously, more trade talks can only be beneficial… well here’s hoping! Irrigated cotton continues to fair well, though dryland crops that already took a sand blasting last month are looking to continue deteriorating rapidly with no drink in sight. Prices today for seasons ahead now stand at 2019 $590 and 2020 $580 (at time of writing).