US Traders must have had a good long weekend celebrating Presidents Past, with the grains markets, taking a turn for the upside. Wheat made the highest close since December, putting on over 20 USc/bu in the last 2 sessions, winterkill threats seem to be behind the push higher as traders look to cover themselves whilst they cannot quantify the expected reduction in production. The corn market looks to have picked itself up from the sideways trading of the last couple of months, on the back of continued domestic demand in the US, whilst export demand will most likely go South to Argentine and Brazilian crops, which overnight saw production estimated increased, slightly higher than the last USDA report. Soybean futures made the highest level since last September, but growers have been active in selling over the last couple of days, and the market closed just a little in the red.
The cotton market took an inside night, and as has happened the last couple of times we headed towards 90 USc/lb the fund managers that have driven the market to current levels, decided now was as good a time as any to protect capital and take profits.
The aussie has slipped back under the 90 cent mark mid-morning, after the US Federal Reserve minutes released this morning indicated that the path for winding back of asset purchases in the US would remain set at $10B/month unless economic news came out to suggest that this should be altered. The other big news out this afternoon was the Chinese Purchasing Managers Index (PMI), which came in at 7 months lows of 48.3 against the expected unchanged reading from January of 49.5
Some reasonable falls of rain have been recorded over the last 48 hours, but western NSW growers have mostly missed out yet again, with rain slipping just a bit further south than had been forecast. The grains markets haven’t overreacted to the rain, ex-farm wheat is again approaching the levels of early January, whilst barley is holding its ground, mostly capped by the ability of the trade to source grain cheaper in the south of the state. The sorghum market is continuing to tread water, with the northern NSW harvest getting close to wrapping up and some better quality starting to find its way into the header up on the Downs.