The international wheat market is teetering on an upside run as US crop rating dropped another 1% (33% Good-Excellent), and weather that was forecast proved uneventful, and has been followed by yet another bout of freezing temperatures, and the ever increasing chance of winterkill. US exports last week surprised most traders and tension in the Black Sea region both added to support prices. The corn market followed the wheat market overnight, with planting underway in the states, with 3% of the crop is estimated to be in the ground. There is still a long way to go to plant the 37 million hectares forecast. The soybean market chose to ignore a number of Chinese soybean cargo cancellations from last week, following the other grain markets higher.
The cotton market found some support from two sessionsbelow 90 US cents/lb, with the front month putting on 183 points as the index funds finalised their rolling of positions from May to July contracts. The fundamental supply structure in the US remains the tightest in over 2 decades, and is the main support of futures prices. Cotton plantings in the US seem to be on track with approximately 8% of the crop planted at the end of last week.
Our dollar jumped back over the 94cent mark overnight ahead of the release of the RBA minutes for the April meeting. The statement is not expected to pull many punches and indicate that an increase in rates, is likely to be the next move made, given our economy is continuing its transition from mining led investments, and growth seems to be within the RBA’s target range.
The local feed markets are beginning to see wheat being offered as new crop planting seem to more assured, keeping a lid on prices and pushing delivery periods spread out from prompt, all the way to August and September. The spread to feed barley is starting to attract some end users, but a number are looking for at least a $25 discount before returning the grain to it’s feedlot ration. Genuine Sorghum1 is being bid at close to the numbers seen before the rain, but most are preferring to get the crop in the bin to determine quality before committing to a sales program, for growers with off grade sorghum, let us know your specifications. New crop wheat has remained softer, with most end users non-committal to purchases this far out, whilst the track market is taking a lead from international prices, with basis losing a little ground, but remaining firm. We have some interest in hectare contracts for both canola and faba beans, and are keen to hear from any growers interested in locking in some production.