Overnight saw the USDA release its latest market moving World Supply and Demand update. Corn and Wheat information was mostly price friendly. World wheat ending stocks dropped a grand 1.67Mmt and with 4Mmt wiped out of the US ending stocks due to export sales, a number of analysts are looking at the new crop prospect in the US, which last week saw deteriorating crop conditions across a number of growing regions with the continued cold, expected to impact a substantial number of hectares. The corn balance sheet tightened up a little as most had forecast, with use increasing and world production remaining mostly unchanged, but overall stocks remain comfortable following the record US crop. Soybeans lost some ground as most expected, whilst the US supply tightens, but a plentiful supply from South America starting to come on line will more than fill the void.

The cotton market made new ground and pushed towards the 90USc/lb level prior to the release of the USDA report, but the tightening forecast with increasing US exports did not eventuate, and the weight of a 94.5M bale cotton inventory pushed the market back inside yesterdays close. The bears seem to be holding the higher ground for now, as cert stocks continue to grower in Board warehouses.

The aussie dollar has continued to hold its ground closer to .90 since last week US employment data was less than impressive and China saw some improved economic development. Keep an eye out over the next 24hrs, with the new Federal Reserve Chairman giving her first speech to the House of Representatives, which may give some insight into her own view on the tapering of qualitative easing.

The domestic market continues to operate in a mostly drought driven fashion. A number of traders are continuing to talk up the prospects of a central Qld sorghum crop which is going in the ground now, but Northern NSW and Southern Qld has remained dry and the chance of a winter crop for the coming year starting to hang in the balance. Prices for wheat and barley remain mostly firm with the odd parcel of grain being traded thru the office. We do have some interest in high protein into Narrabri for packing, whilst SOR1 prices continues to rally on the back of limited deliveries, spreads to SOR2/3/X remain a price on application in both Brisbane and Newcastle port zones.