Last night saw the market moving grain stocks and acreage report released by the USDA that most had expected. Soybeans took the biggest hit, finding 730,000mt of beans and the record  34.3M hectares of bean plantings sitting at 72% Good to Excellent was the force that pushed most of the grain space lower. Wheat was a follower, the spring crop has an extra 280K hectares over expectations, and with the crop in relatively good shape, the wheat contract  is approaching a life of contract lows. Similar to soybeans, corn dragged up an additional 2.5Mt of old crop stocks into an already comfortable position, and whilst the planted area is the lowest since 2010, it is the 5th largest planting since 1944.

The cotton market continued its price slide, year on year plantings increased by 380K hectares, and estimated production jumping up to approx. 17.5M bales. These numbers assume a slight lower abandonment then is currently being used by the USDA, and are expected to be reflected in the new World Supply and Demand report. In a market already heavy with oversupply, futures markets look certain to be pushed into the 60-70 USc/lb range.

Currency remains strongly supported at the current levels of  0.94. The RBA meets today, and whilst a rate cut out of the blue would help shock the market and push currency lower, it looks highly unlikely at this stage.  Strength in the Chinese economy is underpinning our currency, with the CBA out early in the new financial year call a 0.97 level by the end of the year.

Domestically, the cold weather may have been just what the doctor ordered, hopefully sufficient enough to slow up the rapidly developing winter crops across the region. Wheat prices have dropped a couple of dollars both track and delivered, for both new and old crop as a result of last night report, but a firming basis has helped hold prices close to current levels. Sorghum on the plains remains difficult to place in the prompt market, as are old crop chickpeas with Ramadan kicking off on the weekend, demand here is non-existent. New crop faba’s have lost some ground with the SA crop kicking along nicely pressuring our local prices.