The USDA’s weekly crop progress report was released last night and has highlighted the cracking pace in corn sowings that have been taking place. Acreage in the ground has increased by a whopping 43% in the past week, from 28% to 71% total, pushing close the 5 year average of 79% by this time of year. The actual amount gone in is approximately 16.9 m hectares, roughly equivalent to sowing the entire Australian wheat and barley crop in one week! The market was anticipating sowings to be closer to 60 – 65%, however the report was released after the market closed last night so futures values were largely unchanged, corn losing 3 USc to close at 649.5 USc/bu and wheat up 2 to close at 685 USc/bu. Losses may be limited though with rain expected to delay further plantings for a period, however the record crop expected is looking more possible now. The wheat market is finding support in the sub-standard winter wheat crop, with 41% of the crop now considered poor to very poor, an increase of 2% on last week.

Domestically, prices remain well supported due to the dry start to sowing, with rain last week doing little to change this view. A chance of further rain this week has convinced some growers to begin their marketing program for new crop wheat. Most commentators are pointing to a much lower priced year for wheat globally with a resurgence in stocks on the back of larger U.S. plantings and improving conditions in Europe and Russia. Domestic production concerns with ongoing dryness, along with recent volatility due to weather and tightness in old crop stocks in the US, has seen multigrade numbers for APW rise from $260s last month to the mid $280s this month. However, the performance of last year’s market is an important reminder of how quickly things can change, with the drought induced rally on the heels of bumper US corn sowings not beginning in earnest until mid-June last year when they failed to receive any rain post-planting and experienced the worst drought in 100 years.

Cotton prices have taken a hit overnight, losing 66 points to close at 85.75 USc/lb on the July. The performance of the Aussie Dollar over the last week has been a welcome change from the 1.05+ values we have experienced for much of the marketing year, now hovering around 98.00. A speech by Chairman Bernanke of the US Federal Reserve later in the week will provide the next direction for the dollar with any indication of an easing of the QE program potentially pushing values further down, however several commentators are suggesting a bounce could be more likely. Indications of further reductions in interest rate from the RBA over the course of the year will help limit gains in the AUD to levels we were seeing even a month ago.

With regard to pulses, old crop chickpea values have dropped in the past few weeks. We were seeing highs of $500XF west Narrabri but these shorts are now filled and prices have come back to $495-500 delivered Narrabri. A few buyers are even telling us they cannot see how these prices are achievable in the current market as they can purchase chickpeas on a DCT basis (delivered container terminal) far cheaper than the published $500 delivered upcountry values. There is little new crop selling interest from growers as the bulk of the crop is not yet planted.

Mungbeans have come off the boil with India being the only buyer in the market due to China not buying. Their demand has softened and prices have fallen also. They have been receiving reports that the Aussie crop is significantly lower this year but have still been seeing lots of offers as growers have been actively pricing. This has resulted in them pulling back and so too has grower selling. The market is expecting prices to strengthen once the current offers dry up and demand returns.

We currently have strong demand for all grades of wheat both on farm and in the system, particularly ASW and SFW 70/10 grades for several destinations in Queensland and NSW. Sorghum is also performing strongly with prices delivered in to Narrabri moving up to $275, or around $260 ex farm for most locations from the north, through to Narrabri and the LPP. We do have demand for high moisture sorghum so please call if this is an issue for you. Homes for high moisture are tight but we do have some at the moment. Please call the office with any enquiries or to firm up where prices are at today.