Fact of the Day –No single hour in any other country sees as many tonnes of fireworks set off as China does at midnight to celebrate the Chinese New Year. 2019 kicks off as the year of the pig.
Finally, the USDA were able to release their report on where global supply and demand estimates sit over the past two months. In the US, reports revealed that the planted wheat was down on where the market first suspected late last year. For the futures to react more hastily, there will need to be more evidence to support the minimised stock outlook heading in to the 2019 season. “The US have now cut their wheat planting by more than a quarter in the last five years” (T.Gorey, CBA). With the government shutdown looking to not repeat itself, the slow pace of negotiations between China and the US are becoming more and more concerning from the markets point of view. The summit in Vietnam in the coming weeks will also play its role, especially as the world watches Trump and Kim Jong-Un play nice for the second time.
Feed grain focus is all but changed, sorghum 1/2 still very much in demand, and cereals are being moved load by load for lot feeders and graziers around the region. With forecasts showing nothing but wind, heat and dust, we don’t expect the demand in feed grain as well as the pricing to soften soon. Chickpeas are quiet across the board, buyers have been out of the market for some time now with overseas demand at a near standstill. Crops abroad aren’t faring well, though their demand is also very low, meaning if they can get close to covering themselves with domestic chickpeas, our peas may seem like they are not desirable for a little longer. The Indian election could be the turning point we desperately need in the coming months.
Cotton futures saw some positive gains to start the week, though they took a sizeable fall off the back of the USCIA data. The US cotton industry association stated that there is set to be a 3% increase in planted cotton for the 2019 season. This gave bale prices here at home a disappointing drop, though at the moment there is very minimal interest in selling due to production uncertainty and the horrific season being faced across eastern states. Prices today for seasons ahead stand at 2019 $585, 2020 $585 and 2021 $545 (at time of writing).