The grains complex was active overnight, ahead of the crop progress report which was released following the closing bell. All Chicago commodities faced some profit taking ahead of the report, but the bearish expectations of the majority of crops being more the 50% good to excellent pressured the new crop months lower. Wheat contracts were supported by continued delays in crop development and harvest, and continued demand domestically and internationally for feed wheat. South Korea has tendered for 140kmt of feed, which the US is expected to pick-up, whilst the rumour mill runs that China may again be on the lookout for more Chicago style – soft red winter wheat. Soybeans planting came in marginally better than expected, with plantings increasing 14% week on week, to 85% of the crop in the ground. 64% of the planted crop is considered good to excellent, helping to pressure the new crop November contract lower. South American farmers have slowed their sales pace, which is helping to support the front month. Old crop corn rallied with continued export demand, tight US stocks and growers in Argentina going on a corn sales strike, which may force delays and more export pressure onto the States. Most of the new crop in the US is in a reasonable condition, with 62% of the crop rated good to excellent.
The cotton market began this week, in a vastly different fashion to last weeks rally into the low 90’s USc/lb futures price. The July contract traded limit down, following a 200pt plunge during our afternoon yesterday. The volatility in the market has been linked to the expiry of options last Friday. The market has returned to carry, after the squeeze on July came to its abrupt holt overnight. 97% of the US crop is in the ground, with 43% considered good to excellent. All eyes are on Texas, where if decent rain doesn’t fall by the end of the week, up to 20% of the crop could be ploughed out only weeks after planting.
The Aussie dollar has lost some of the steam from last week, falling almost 1.5c since this time yesterday. The Aussie remains highly volatile, and will most likely remain like this for the foreseeable future. The RBA was set to release the minutes of its last meeting today at 11.30am, whilst the US Fed are meeting this week, with all eyes looking for further direction from Mr Bernanke with regards to the tapering of the qualitative easing program.
Domestically, new crop wheat has come under pressure from the improved conditions in the parts of the state that have been able to get a crop in the ground. Old crop prices remain strong for all grades the feed market happily continuing to flat price anything in the system and on-farm that meets their minimum70kg/hl test weight, & maximum 10% screenings requirement. Current crop sorghum is still in high demand, delivered Brisbane, Newcastle track, and destinations along with the packers in Narrabri. We are still able to handle sorghum outside of spec for moisture, and we have buyers now looking at the possibilities of downgraded sorghum coming to market given the weather of the past month or so. Old crop Chickpea prices remain fairly stagnant, with subcontinent demand having dropped off, and a new crop which is now around the corner keeping prices under wraps. We have had interest in new crop faba’s at around the $340’s ex-farm level. The end of the month, and financial year is upon us, if you have a parcel that you would like to price, please do not hesitate to contact the office.