Yesterday’s afternoon session saw wheat break above the $7.40US/bu level, mostly pushed higher by the continuing conflict in the black sea which has moved further west, with the key trading port of Odessa now central to the conflict. The release of Canadian stocks data, which showed the highest level in 20 years of 21.5Mmt still on hand, pressured the market through the session overnight whilst the trade awaited for the weekly crop conditions report to confirm what most already knew following last weeks hard winter wheat crop tour. After the close, the good to excellent wheat rating was dropped 2% to just 31%. Corn continues to be supported by the slowness of the planting pace, which came thru at just 29% against the 42% five year average. The slow planting pace is a double edged sword, with the soil moisture that the remaining crop will likely be planted into sufficient to have the trade talking of an average yield approaching 162bu/ac or 10.5t/ha. Some corn area will most likely skip over to soybeans if growers cant get into the field soon enough which applied some additional pressure to the market following the confirmation that South American beans are being imported by US processors. The USDA report out on Friday will give us the first official look at yield estimates for both corn and soybeans.
The cotton market has continued to hold higher ground, continuing its run which has seen 18 of the last 20 trading session finish higher than the previous close. US Cotton planting progress has remained well behind the 5 year average, with just 16% in the ground, the drought affecting West Texas, and continued rain across the southern states both hampering progress. Cert Stocks have continued to grow, which signals that merchants would prefer to deliver cotton to the Board, as mill demand remains mostly non-existent at current prices.
Our dollar remains entrenched in the 0.92’s. The RBA met today for their May meeting of the minds. They kept the cash rate at 2.50% on the back of recent disappointing economic data both here and internationally. We expect the rhetoric to continue, about holding rates for the foreseeable future at current levels, & therefore for rates to remain unchanged.
Domestically, Brisbane and Newcastle port zone new crop wheat numbers have firmed, on both a track and delivered destination basis. New crop barley bids have moved up $8-12 from last weeks delivered bids, following the move higher in the wheat market. The move in wheat and barley is mostly attributed to the lack of grower confidence in forward selling a crop that is only just going in the ground, and the ever increasing likelihood of an El Nino which could result in a lack of rainfall during the growing period. Old crop prices for wheat and barley have come under pressure from grain in the southern states being sold and moving into the north following what looks to be another good start to their winter cropping program. Sorghum demand is dropping off in Newcastle with Pentag loading the only sorghum cargo booked so far out of Newcastle next week, and sufficient lower grade sorghum already in the hands of consumers to keep a lid on prices for the next 6-8 weeks.