The AgVantage Team hopes that all our clients and families had an enjoyable festive season, and found somewhere cool to shelter last Friday during the recorded setting heatwave that hit Northern NSW and Southern QLD. Whilst we have been having the summer like no other, the northern hemisphere has been lashed by gale force winds, flooding rain, and the lowest temperatures in 20 years hitting the US, which have been causing all sort of havoc. The end of the week will see the USDA release the last grain stocks position statement for the 2013 year, along with the 13/14 season winter wheat plantings report. The report should announce the largest crop in 6 years at approximately 17.65m hectares. The cold snap caught a number of people off guard, and snow cover is far from adequate in a number of places, which suggests that the crop could be effected by an amount of winter kill, but quantifying the area affected wont be easy for a few more months. Argentine wheat production for the 13/14 season was reduced last week, but was more than accounted for by an increase in forecast production from Russia and the Ukraine which seems to be keeping a lid on the futures market prices. The corn market has held what is appearing to be a bottom in the market, with some concern for the South American production following the continued dry conditions and the fund managers remain well short on the March contract. Soybeans continue to impress with the market still tight for supply from the States, and we close in on the start of the South American harvest.
The cotton market has held the 80-85 cent range of before Christmas, with the trend more sideways. Chinese demand seems to have somewhat waned during the festive season. Machine picked crop has remained in short supply for prompt shipment, even though world stocks are sitting somewhere around 11 months usage. The local cotton market has continued to hold below the key $500 level, but with basis likely to firm over the coming weeks/month as the crop size becomes more determinant, we may see prices stronger than this if futures hold these levels.
The dollar remains somewhat subdued as traders begin to come back and look at the raft of trading partner economic information that has been released over the new year period. The clear direction we all want the market to go is lower, but the first step in tapering in the States was seemingly priced in before it was announced, so further strengthening of the US economy will be pivotal to pushing our currency lower.
The domestic grain market has been slow to come back to work, with some traders out until next week. You can now throw a net over the spread between wheat and barley into most destinations, as the traders continue to try and find cover in this market. One of our buyers is continuing to look for cover in the Durum market, both ex-farm and in the system and would be interested to see offers from growers holding on to DR1 and DR2. Sorghum demand is continuing to push prices higher also, but a number of growers are remaining somewhat concerned about quality given the finish for the crop north of Narrabri. The pulse market is subdued into local packers, but the Downs market for chickpeas is advertising improved prices, all be it for a February-March delivery. For growers holding onto chickpeas on farm, & would like to move their stock without selling, we can offer warehousing in Agripark Moree. We also have Kwik Kleen grain cleaners available for growers that might encounter quality issues with their chickpeas prior to delivery, or small grains in sorghum.