The  grains market has continued to recover following last weeks USDA report which pressured the markets into their most recent lows. The wheat market was buoyed by the reported purchase of 300,000 mt of US wheat. Total purchases from the US for 13/14 crop now total 1.5mmt, whilst we also got a look in with 300,000 mt of Aussie wheat also reported to be sold into China overnight, a sign that China are looking to diversify origination of grain stocks. Soybean demand remain strong domestically in the US with continued good crush margin, and meal demand, whilst the export demand has switched back to South American beans. The corn markets traded higher for most of the day on reports of China again figuring in the mix with a purchase of some new crop US Corn, but the bearish weather outlook taken by most kept a lid on any real gains in the market. Many Corn and Soybean bulls are looking ahead to Mid July, when the weather is expected to bring hot temperatures to a large portion of the Western Corn Belt, which without rain prior could stress some crops.

The cotton market continued a run up on a light volume, and bullish commodity markets, which also saw Oil through the $100 US/barrel mark. Approx 14.7k in contracts traded during the session, the Dec/March spread has continued to tighten, with the 14 crop contracts of March, May and July advancing further than the December contract. The backwardation in the market looks set to return to carry, with cert stocks remaining heavy, at over 600,000 bales. Ecom are bidding $491 for 13 crop, and $495 for 14 crop, and have been taking orders for both years crops at $500/bale.

The Aussie dollar has come under some additional pressure in the last couple of sessions, taking out the September 2010 lows hitting 0 .9036 during trading overnight. Our commodity linked currency remains out of favour whilst the discussions regarding the tapering of US Government Stimulus, and slow down of the Chinese economy continue.

Domestic new crop  prices have strengthened following the weakness in currency markets, and the lift in commodity markets internationally. New crop wheat is $286 Newcastle / $284 Brisbane. We are continuing to look for Sorghum 1 for delivery into Narrabri, with homes for out of spec grain starting to dry up. Old crop wheat prices are continuing to hold reasonably well, but a number of buyers are reporting a slow down in demand for feed grades, as homes begin to fill ahead of our new crop harvest. High protein on farm is beginning to receive some interest in the packing market, as the international market prepares for a possible reduction in milling grades of wheat.

Ring the AgVantage team if you have a parcel that you would like us to price.