Last night the monthly USDA report was released and was mostly bearish for grains and oilseeds and as a result, futures pushed lower in overnight trade. US wheat supplies for 14/15 lowered due to an increase in beginning stocks which more than offset reduced winter crop production. Global wheat supplies for 14/15 are raised by 4.1 million tonnes and world production is pegged at 701.6 million tonnes, up 4.6 million mt from last month. World ending stocks are also higher this month, up 1.2 million tonnes. Global coarse grains are projected higher, by 2.3million mt, with larger corn beginning stocks and production. Global corn production for 14/15 is raised 2 million tonnes and ending stocks for corn are also projected 0.9 million tonnes higher.

On the domestic front, we are still seeing a strong basis level in NNSW and SQ markets, which are being supported by the dry conditions. There is a forecast for rain this weekend, and there are a number of producers waiting to see what this change brings before selling. We believe old crop markets should remain fairly well supported as consumers will still need cover through to new crop although a few are informing us that they are mostly covered and only have a small hole during August to fill. New crop, however, could be a different story. If we do receive more rain, the expectation is that basis will be further eroded, particularly in the southern markets as they have encountered one of the best starts to the season in a number of years. If this happens, and they do end up with large production come harvest, we would expect grain to move from the south into the northern markets. Last week we saw heavy selling from Central West growers on new crop wheat. Northern growers are still very reluctant to do so given the current conditions. This week, new crop barley is bid around $245XF north of Moree. F1 delivered Dubbo for new crop is $180/mt, equating to around $160XF. We don’t see an $85/mt difference in freight and it makes sense that consumers would look to purchase this grain cheaper and move north. In saying this, we don’t expect any growers are actually selling new crop barley in this region.

Chickpeas are a dead dog at the moment. There are still large volumes stored on-farm of old crop with the market declining over the past week, growers are digging their heels in even further. Buyer demand is extremely quiet on chickpeas at the moment. New crop peas have also declined but there is also zero selling interest. Fabas are also strong at $420 delivered Narrabri or Goondi for harvest delivery.

New crop durum values are strong and around $375/mt Newcastle track at the moment.

Cotton remains in the high $460’s, low $470’s for July¬† delivery.