The short covering rally in the wheat market came to a grinding halt overnight, with the ever increasing ending stock proving to burdensome, pushing futures lower all session. The Indian agricultural minister only fuelled this fire with the outlook for record subcontinent production, expected to be the largest recorded, with in excess of 100mmt of wheat grown for the 13/14 season. The corn market also lost ground, heading back towards the 40 month lows seen prior to the USDA reports release on Friday, with stocks still considered plentiful after the domestic reduction in production, and a lower demand for ethanol – the biggest user of US corn. Soybeans continued to move higher on the Chinese buyer bandwagon, the every growing South American crop just cant seem to compete logistically with US stocks.
The cotton market pushed to the higher end of the recent range, not retreating like many though may have been the case following yesterday’s small 5 point gain. The market has reported there is a Chinese buyer looking for prompt shipment of high quality cotton, and the speculative market joined the buying late in the session, with some eyeing a break above 85 cents in the next session, pushing futures towards the 87 U.S.c/lb mark.
The dollar lost some shine overnight with another round of data out of the US which included a $3 billion profit from the Bank of America, mostly on the back of the improvement of credit conditions in the US. Unemployment data out this morning here, was well below the markets expectation, and has sent the market lower making a new recent low.
The domestic markets for wheat and barley have continued to find strength in the disappointing start to the sorghum harvest north of Narrabri, with test weighs as low as 55 & 56 kg/hl, and screenings reaching the upper end of the scale at 40-45% seen across some parts of the northwest. The market for SOR2, which seems to be more likely east of highway has remained very illiquid, even more so for anything that falls outside of this specification – SOR3 & below, with parcels being priced on application. We have seen the Brisbane market for wheat break into the $350’s for SWF as well as sorghum, whilst barley is $330+ delivered the darling downs, our buyers are keen to see offers from any willing sellers. We also have interest in chickpeas delivered Narrabri, Moree and Darling Downs. Narrabri $400, Moree $400, & Dalby $425.