The big news out of the states is the announcement that the US Fed has – finally – begun tapering of their Quantitative Easing program. This will see the massive US$85 billion/month bond purchasing reduced, to US$75 billion. Still an enormous amount but is the first step after months of speculation over when the tapering would begin. The Aussie dollar has been steadily declining in anticipation of the announcement, but still managed to push below its support of 0.89 following the announcement to hold this morning at 0.885. The falling AUD has come at a fortuitous time, as wheat futures dropped overnight to touch 18 month lows. Wheat markets have been reacting to current global stocks predictions holding at comfortable levels, with 10 of the last 11 sessions finishing in the negative. That being said, Northern NSW and Southern Queensland prices continue to be insulated from global markets due to domestic pressures, with the enduring dryness and likelihood of a reduced sorghum crop in Queensland this season supporting prices in to feed destinations. Cotton has also been a major beneficiary of the falling dollar, with growers reengaging with the market after cash values have closed around $500.
As mentioned above, the continuing dryness in Queensland and North NSW is providing support for grain prices for movement in to Northern feed markets. Prices for stocks being held on farm have slowly been improving throughout the week as buyers look to secure stocks through January and later. 70/10 or ASW prices are now above $280 ex farm for Moree north, reaching upwards of $290 north of Goondiwindi. These prices cover grades right up to APH2, with only a slight premium currently being offered over feed values for high protein. This reflects the strength of the feed markets matching protein values, as opposed to weakness in protein markets. Similarly, barley stocks are in high demand for movement in the new year, with on farm parcels up to $265 around Moree, and stocks in the system at Moree priced at $250 site. Liverpool Plains feed markets have also been supporting prices for grain that feeds in to this area, with strong demand barley and SFW stocks for movement in the new year. Wheat stocks in the system haven’t been seeing the same solid gains as being seen for stocks on farm, with the exception being sites Narrabri north. Most other sites in the Newcastle zone have been trading in a range of only a few dollars difference over much of the past month, with APW in the system making some gains with Newcastle track prices up to $309.
For those growers lucky enough to get their crop in the ground, sorghum has been a strong performer over the last few weeks. Both ex farm and track values have made gains recently, with demand from both exporters and domestic users providing support to his market. Brisbane track is currently bid at $318, while Newcastle at $312. Stocks able to be held on farm have several options for movement, with delivered markets in to Brisbane currently at $330, to Newcastle port $316, Narrabri packers at $270 or Tamworth up to $290. Please call with any enquiries.