Over the weekend in the US, light rain across the Hard Red winter growing region was far from the beneficial event that had been forecast, and the market took a run, but only just a few cents higher. With the official Crop Progress report for the year being pushed back to tonight, the general expectation is for a 22-27% decrease in the good to excellent rating, from the last report in November last year, and a slow start to corn and soybean plantings. Hot on the heels of the Progress report will be the USDA World Supply and Demand report, which has most still leaning on a tightening of carryout stocks of both Corn and Soybeans to support near term prices. Seeing as that the carryout issue was foreshadowed only 9 days ago, unless it comes in drastically outside of the recent indications, it will probably be business as usual.
The cotton market closed on its lows, giving up all of the Fridays sessions gains. The speculators look to be changing there side of the ledger, focusing on the expectation that the tightest US stock position in several years will continue to hold prices at current levels or higher, when coupled with dips being supported by Mills looking to finalise On-call contracts.
The dollar has continued to hold the recent highs, briefly breaking thru the 0.93 cent mark overnight. The next focus for our currency is Chinese international trade data, and Australian employment data out on Thursday, which a number have forecast to come in below expectation, possibly increasing unemployment.
The local wheat market has picked up all of the dollars lost following the rain event of a fortnight ago, reaching the $370’s Darling Downs, whilst barley has seen its spread to wheat increase between $20 and $25/mt, depending on the destination. The spread looks unlikely to tighten in the near term, with wheat becoming the overall favourite for feedloters running a white grain ration, due mostly to the increased chance of its supply being sufficient to cover requirements until we see a new crop harvest. Sorghum has picked up on the back of quality issues that resulted from the rain on sorghum crops that were harvest ready. If you have off spec sorghum, give us a call with some results as we have homes for most quality parameters. Test Weight is most critical in terms of price at the moment.
New crop prices for most remain firm with limited selling so far, as growers continue to make the final planting decisions for this season.