With the last USDA report for the year looming, the markets took mixed views into the close overnight.
The corn market was filled with short covering, and speculators taking the “if there is a surprise” sort of positions, whilst talk of additional US corn cargoes are being cancelled by China, are keeping a traders on their toes. The wheat market is expected to see a report which is bearish at best, with increased production of Canadian and Australian wheat expected to loosen the ending stocks position of the world supply, whilst in the US, winterkill looks to have claimed some of the US crop with some speculation, that up to 15% of the entire acreage planted being affected by cold weather of the last week, but with snow covering most of the crop as it heads into dormancy, the area affected won’t be known till the spring, or when the headers hit the field. Soybeans ran up on technical buying, and support from China, and the tight supply expected to be forecast by the USDA, prior to the South American crop coming online in February/March of next year.
The Cotton market did all its work yesterday, on the back of poor weather in Texas, which still has approximately 10% of its crop left to harvest. The USDA report shouldn’t pull anything we don’t already know out of the hat, with a record world ending stock expected to increase slightly on the back of a marginally higher revision of US production.
The dollar has continued its sideways/range bound movements, trading from .8999 – 0.9200 As we move closer to the US Federal Reserve meeting next week, we should expect to see some currency fireworks, but most are picking early 2014 to be the time earmarked by the Fed to begin the reduction in economic stimulus, in-line with the succession of current Federal Reverse Governor Bernanke, to Janet Yellen.
Locally, the sorghum market is the most active, and with numbers in or close to the $300’s delivered for both Brisbane and Newcastle market zones, good selling opportunities are about for most growers. The wheat market has continued to hold reasonably firm domestic numbers, but enquiry has slowed down with growers reassessing their positions ahead of the Christmas/New Year period. The premium for January onward delivery has slowly eroded, but demand still remains for the delivery period, and growers are encouraged to offer parcels that they are looking to sell. The pulse market has come off, with most of our Chickpea buyers indicating that the short they had all been looking to get some sales into has been covered.