Last night the USDA released it’s monthly USDA report. Some points to note were; US wheat ending stocks for 2013/2014 were 25 million bushels higher, with lower imports more than offset by a reduction in feed & residual use. Global wheat supplies raised 0.5million tonnes with higher beginning stocks. World wheat production for 2013/2014 is lowered 0.2million tonnes. World wheat imports are lowered 1.7 million tonnes and the biggest impact was China’s 1.5 million ton reduction. This also affected world exports, which was estimated lower. Global wheat consumption for 2013/2014 was lowered 2.4 million tonnes, predominately based on a reduction in China’s wheat feeding of 2 million tonnes.

US feed grain ending stocks are projected lower for 2013/2014 due to a reduction in corn, barley and oats. Higher corn exports have reduced ending stocks, as well as strong export sales, higher exports and increased world demand. Global corn production is increased by 6.4 million tonnes, with 2 million coming from Brazil and 1 million each for South Africa and Russia and world corn ending stocks for 2013/2014 are lowered 0.5 million tonnes.

US soybean supplies are projected to increase 30 million bushels for the 2013/2014 season, at 3.49 billion bushels, with increased imports contributing to this. US ending stocks are estimated at 135 million bushels, down 10 million from last month. Global oilseed production is increased by 0.2 million tonnes, to 504.5 million tonnes, however global soybean production is lowered 1.4 million tonnes this month to an expected 284 million tonnes. Although decreased, it is still record production. On the back of the report released grain markets were mixed overnight with wheat down 12 cents/bushel and closed at 669cents/bushel. Corn fell 4.75 cents to close at 502.25 on the May contract and soybeans were up 12.75 cents.

We have continued demand for old crop wheat across all areas and values have strengthened again slightly this week. We have seen a number of enquiries on new crop multigrades and 70/10-type contracts for harvest delivery. Currently, multigrade prices are $320-325/mt track for both Newcastle and Brisbane port zones and $300-310/mt delivered Downs for 70/10 wheat.

New crop faba bean prices have been a topic of conversation also. We have a number of products available, ranging from ex-farm flat-priced, through to multigrade delivered packer area and fixed tonnage contracts. Prices today are around $380/mt delivered Dalby for No 1 quality on a fixed tonnage contract with a $20/mt discount to a hectare-based contract. No 2 quality would be at a $20/mt discount to the No 1 price. These would be for Oct-15th November delivery.

The chickpea market remains fairly quiet on the demand front and a lot of growers are holding out for another spike to sell. To give you a bit of an update on the current market, we are hearing that India is not actually buying Aussie peas at the moment. It is Bangladesh (who are a third world country and well known for defaults). The previous spike produced some panic buying and now that prices have softened, traders are dealing with buyers at destination that have already been trying to default on these contracts, or delay shipment. Our buyers are telling us that they are able to buy peas on a DCT (delivered container terminal) basis cheaper from the trade than they are able to purchase from the grower direct and execute packing. Currently, Bangladesh’s demand is around 20 000mt per month. India’s demand may not be known until June/July once their crop is harvested. $470-475/mt delivered Downs is the current market for chickpeas for May delivery.

Sorghum quality on the Liverpool Plains is mixed. A few growers are informing us that they are experiencing stained grain and shot & sprung but test weight seems to be ok. For this type of quality we were bid yesterday $280/mt which seems to be a reasonable price for this quality. At present we believe that any sorghum with test weight still above 70-72kg/Hl and minimal screenings will find a home regardless of staining and shot & sprung levels.

Cotton last night rallied post the release of the USDA report, but the rally was short-lived before the May contract plummeted and closed down 135 points and July fell 98 points. This week we have seen carry return to the July contract which the trade view to be a function of funds ‘rolling’ their positions from May into July ie: selling the May contract and buying July. The USDA report last night reported that US production was down 320 000 bales and ending stocks at 2.50 million bales, which is quite tight. Today, ECOM’s price is $506/bale.