Grains overnight lifted slightly after taking a hit the previous night following the USDA report’s monthly release. The March wheat contract overnight finished up 4.25 cents mostly on thoughts that the market is oversold and that US wheat is now competitively priced into world markets. Egypt bought 300 000mt wheat overnight but it wasn’t US wheat, it came from Romania and France. March corn closed up 3.25 cents after choppy trade but news that 120 000mt of US corn was sold to an unknown destination provided support.

Soybeans gained 6.5 cents on the March contract after two sided trade also. Upside was limited by weaker basis levels as producer selling has increased during the past few days. The bears are looking at weather in South America and estimates for production being higher than the USDA’s report as negative going forward. Cotton gained ground overnight as well, although the rally doesn’t seem to be supported by fundamentals as the USDA WASDE was largely unchanged. An inverse has developed between the March & May contracts of 11 points and May to July is currently at a 71 point inverse.

Locally, we still have demand for most grades of wheat in the system and buyer demand is quite specific to location/grade so if you are pricing 3 or 4 different grades of wheat you may find yourself contracting to 2-3 different buyers to get the best returns. We have delivered Newcastle homes for APW through to APH as well as delivered packer and ex-farm. Durum values remain strong in the system and demand on-farm is present but most likely limited to DR1 only. During the past week we have seen volumes of durum sold from the system mostly and we feel that if you can achieve $300+ at site for DR1 they are probably not bad numbers, especially given international values.

Sorghum remains strong and at $300/mt delivered Newcastle is a strong starting point for those wanting to commit some forward sales. At these values it has been actively trading although most buyers have a delivery period of April/May. Once we start moving into June/July delivery sorghum becomes cheaper to buy out of CQ where track values are around $265/mt and the Southern Texas crop comes online and international demand dissipates. Of course we will still have domestic demand and in the 2012/2013 season we saw unprecedented demand from China which traders hope will continue. This created a very large container market and one of our buyers sorghum export volume in containers almost tripled last year from the previous year. It also meant that the drawing arc for sorghum into Narrabri extended to Gunnedah/Kelvin and Mullaley (which generally makes it’s way into local, Newcastle/Sydney or southern domestic markets). It is definitely something to keep in mind when looking to price new crop sorghum as Narrabri delivered numbers have been as high as $265/mt which makes it competitive to a delivered Newcastle number and a more local receival point. Track values have been in the high $280’s however today is at $298/mt.

Barley remains fairly quiet on both demand and selling interest. We currently don’t have any December homes on the LPP and F1 delivered is between $255-258/mt delivered for January. In the north we are still seeing premiums for F1 in the system for sites Moree north and are happy to look at any barley ex-farm for Jan onwards.

Pulse markets are quiet and have little grower selling activity since chickpea values have come off their recent highs. Fabas this week have traded at $365-370XF for a small parcel ex-farm Walgett that is making it’s way into stockfeed.