December wheat closed up 2.25cents on the back of strong demand for feed and reports of the Chicago crop quality issues due to heavy rain. Harvest pressure is limiting gains as the Eastern cornbelt harvest is progressing, along with the western plains. There are however rain delays in Illinois, Ohio and Michigan which won’t affect production but could lower test weight and increase risk of disease. Black Sea origins continue to offer cheaper wheat than US at present, with rumours that the Black Sea sold 450 000mt into Iran last night.
December corn closed down 0.25cents with mixed news against the December contract. The new crop market is watching and trading weather daily with concern that hot and dry conditions will create crop stress and production decline in parts of the corn belt as the crop is coming into the critical pollination stage. Rains in parts of Illinois overnight could see the crop through the pollination stage. Soybeans were mixed overnight with old crop contract months closing lower but the November contract closed up 8.5 cents on the back of weather and production concerns.
Sorghum harvest is continuing again as growers are taking advantage of fine weather to harvest, however for the most part moisture levels are still high and this grain requires drying of some sort. Locally into the packer, demand is thinning with buyers filling existing shipments and no more sales are being made into China, which is where the strong demand this year has stemmed from. We still have some demand although is becoming very limited. Domestic sorghum demand has also slowed as consumers have switched to wheat in rations. At current sorghum/wheat values they view wheat as the more economical or cheaper alternative and are sourcing predominately through the trade who are still sitting on large volumes in the Newcastle zone.
Wheat demand into Brisbane has also slowed and the highs of $356/mt delivered or $300XF for NNSW/border region growers have disappeared too. Prices at the moment are more like a $335-340/mt delivered for August/Sept delivery and we are struggling to find prompt wheat homes.
Looking towards new crop, there is still an inverse in the domestic market however new crop this week has traded at $250XF in the north for ASW or better.
Cotton overnight had slight gains however the rally in the AUD has negated this move and prices today are unchanged at $488/bale for 2013 and $487/bale for 2014 crop. We are still taking market orders and overnight $450/bale USD was triggered. As most gins are thinking of winding down, we are seeing more balance-of-crop enquiries. ECOM are happy to price on this basis, please call to discuss.