The wheat market final succumb to the international supply and demand scenario, closing down under the $7.00 US/bushel mark which had provided continual support through the recent drought and frost damage reports. The USDA report last Friday indicated production for 14/15 would decrease, it also reduced consumption, and released a headline ending stocks of approximately 187.5Mt, which the market now see’s as reasonably comfortable. The jump up in Corn plant last week which put planting pace in line with the 5 year average looks to be continuing this week and this is putting pressure on corn prices, along with increases in ethanol stocks. The weeks slide in Soybeans was halted overnight as the switch from corn to soybeans hectares seems less likely to be as influential as thought last week.
The cotton market has continued its slide from the highs of last week. The 90.50 USc/lb level for the July contract remains the last level of resistance, which is broken could trigger a technical sell off. The mounting cert stocks which sit just short of 400,000 bales is help to close the July/December invert to 782 points. Basis for local cotton has also come under pressure from the quality that has so far been received this season, mostly 31 & 41 colour, and is reflective of the discount that the merchant is being charged to deliver outside of their existing sales commitments.
The Aussie dollar has traded mostly unchanged in the 0.9301 -0. 9385 range all week. The federal budget did little to pressure our currency, and as investors continue to chase yield on investments, money has kept flowing in. Even speculation about the Chinese economy hasn’t damped spirits.
Local prices for old crop wheat has firmed this week for both Darling Downs and Brisbane delivered markets, barley prices have remained mostly the same, even as the spread widens to wheat. Sorghum prices haven’t fallen out of bed, but we are only seeing limited demand in the prompt market, but at a $50+ discount to wheat, the feed market will be looking to take advantage of this cheaper alternative if they can take volume. New crop prices for wheat and barley are back a couple of dollars from the start of the week, for both ex-farm and track contracts. Most growers are taking the cautious approach to sales, preferring to see the crop established prior to committing to any forward selling program. New crop pulse prices are remaining firm, with faba’s being bid at $400 delivered most Northern NSW/Southern Queensland packers.