The markets had a mixed night, but the big news story was the marked increases in projected wheat and canola production, as the Canadian harvest winds up. Stats Canada have forecast an increase in all wheat production to approximately 37.53mmt, up significantly from the USDA forecast of last month of 33mmt, interestingly durum accounts for some 6.5mmt of this production. Teaming this Canadian increase with the much debated ABARE prediction for Australian production makes the world market look a little more relaxed than the last supply and demand report. The corn market is coming to grips with the cancellation of another couple of US cargoes due for delivery to China as this ongoing GM saga unfolds, but with the forward sale position well ahead for the US these cancellations have hardly raised concern with the trade. Soybeans rode the stronger dollar, and a tight US supply, whilst new record production for Canadian canola, and the forecast for good production in South America seem to be providing some limit to the upside at the moment.
The cotton market has remained reasonable stable, trading a range which see’s support for futures around the 77 cent mark, whilst resistance is seen at 80 cents. The late US crop is experiencing some poor weather, delaying the last of the crops harvest, which seems centred around Texas, but it will remain to be seen how this might affect quality. The fall in our dollar has been the key to local prices, with Ecom’s price today is $466, US dollar contracts are also available on application.
The dollar made 3 month lows overnight, with less than impressive Aussie GDP result for the 3rdquarter, which coupled with the bearish sentiment of continuing improvement of the US economy, pressured the currency down a full cent as the reduction of the QE program gets closer to being on the table. The GDP result is sure to have the RBA discussing the chance of a rate cut at its next board meeting to try and help spur our economy along in the new year.
Local prices seem to be holding reasonably firm, with the fall in the dollar adding a couple of dollars to a few grades of wheat. Packing prices for high protein wheat have remained well supported, along with some delivered Newcastle and Brisbane deliveries. The sorghum market continues to strengthen into all market destinations, the preference seems to be to buy the grain ex-farm, depending on the location, but selling has been limited for the most part as grower watch the forecast, hoping to get under a better fall of rain to ensure their production. Demand for barley in the new year hasn’t been setting any records, with grain from Southern NSW capping local prices for the moment. The pulse market has had a slower week, losing anywhere from $10-20 dollars at some packing locations, but buyers are keen to entertain offers from any growers looking to make a sale.