The Friday session in the US provided a bit of respite to the continual downward spiral in US wheat futures prices. Winter red wheat harvest is kicking into gear in the US, and so far yield has been less than impressive, and the weekly crop rating out this morning was unchanged from last week. Continual improvement in European production has the bears with the upper hand on price. The majority of the corn crop is now in the ground, in good to excellent condition, but Corn prices gave up most of Fridays gains on new that China would be suspending any further Distillers Dried Grain imports over some GM contamination concerns. Currently 600kmt is sitting in Chinese ports having tested positive to containing GM corn. Given that China is the US’s biggest import of the by-product of ethanol production, this cloud could hang over futures prices until it is resolved. Soybeans remain firm for prompt delivery, confirmation that the US balance sheet will mostly likely come on Wednesday (US) with the next USDA World Supply and Demand Report. New crop soybean planting is continuing well ahead of schedule, and the new crop prices reflect the forecast to return to plentiful supply.
Cottons’ rally, late last week was seemingly short-lived, with July dropping back to the 84USc/lb level overnight. New contract lows for both July and December were reached, but the spread between the two contracts seems supported by the 410k bales which sit in certified warehouses. West Texas has again received more meaningful rain, and with most of the remaining US crop in the ground, a swing up in Texas acreage will continue to pressure the December contract lower.
The Aussie dollar found a few friends over the weekend jumping up to the mid 0.93’s, with Chinese import/export data considered good by most, and US payroll and unemployment data was better than expected, but that on it’s own could not force our currency lower.
Locally, new crop prices seem to have found a new level of support, following last weeks’ drop as growers came to the market, mostly in the Central West and Port Kembla delivery regions with a reasonable number of tonnes understood to have been traded. We continue to see value at current prices for most growers if they are confident on production. Basis remains strong, but will come under pressure from Southern production, and import parity if the season continues as it has so far. New crop faba prices have jumped up as merchants look to fill early export enquiry from a limited northern area production. Old crop prices are mostly unchanged from last, but of note is that old crop barley delivered Rangers Valley is on-par with delivered Downs. The sorghum market is continuing to slip lower, and homes are proving difficult to find for anything prompt.