The USDA released a report overnight which was considered to have a bullish sentiment. With the August report historically one to set the cat amongst the pigeons, they did not fail to deliver, with a number of both traders and fund managers caught short by this report. The wheat market was not overly excited by reports of decreasing US ending stocks, and increasing world production which levelled the score. Wheat’s row crop cousins took the report and ran with it. Soybeans jumped up on the back of decreasing domestic ending stocks and US production, after 202k hectares were cut from the planted area estimates, and yield was cut to 2.86t/ha for the remaining 31.2m hectares. World oilseed ending stocks booked a slight increase overall of 200kmt , mainly from increased production of canola, palm kernel and sunflowers, picking up the decrease in soybeans and cottonseed. Corn also saw reductions in total production in the US to 349.6mmt, as yield was dropped to 9.69t/ha. Total coarse grain ending stocks dropped almost 600kmt, with decreases in the US, being picked up by improved conditions in the FSU and EU and subcontinent regions.

The cotton market ran up on the coat tails of its row crop counterparts, but the report was still considered bullish for cotton putting on good gains after the USDA forecast the smallest crop in 5 years at 13.05m bales for the States. With still a number of months to go, abandonment is already measured at the 5 year average, and yield is being wound back for the US crop. World ending stocks are still a healthy 93.8m bales (58.3m bales held in China), even as world production dropped 1.7m bales, increases in Indian and Pakistani production, covering the marked decrease in Chinese, US and Uzbekistan production.

The Aussie Dollar finished last week on the best run against the US in 18 months following the better than expected economic data from the Chinese, and a statement from the RBA suggesting that it would be happy to watch our economy for now, but keeping the door ajar for another rate cut in the future. With little economic data out for the start of this week, the dollar has floundered around the 0.91 – 0.915 level, with no clear direction.

Domestic prices have jumped a couple of dollars following last nights’ report. Canola was a big winner putting on $8 -10, reaching the low $520’s Newcastle track. New crop wheat is again trading the mid 290’s track in both NSW and QLD with some site specific numbers reaching into the low $300 equivalents. We have buyers still keen to secure SFW (70/10) quality wheat for both the harvest (Nov/Dec)  and post harvest slot (Jan/Feb/Mar +), at prices better than the track equivalent, for growers looking to utilise on farm storage, instead of delivering to the bulk handling system at harvest. Barley has started to attract some interest, particularly in the north with numbers approaching $240 ex-farm on the border, but offers from any location will be considered. The pulse market has dropped a couple of dollars, with Faba’s back around the $385 for #1 quality in both Narrabri and Goondiwindi. The chickpea market remains very quiet, with most buyers reluctant to even put a bid in the market, and growers are even more reluctant sellers. We have some limited demand for in spec sorghum into Narrabri, and for growers who are required to dry grain, we have buyers looking for September/October pick-up ex-farm.