Weather remains the key to the downside pressure building in the grains space. Corn has been heavily oversold by the funds with an expectation that rain forecast in the next 5-7 days across most of the corn belt will extend the successful pollination period for most of the crop. Soybeans are also benefiting from continued good growing conditions, but demand is continuing to outstrip supply pushing prices higher. The crop is heading into the key pod setting month of August in good moisture conditions, with the exception of Iowa which remains a little off the ball for now. Wheat made its lowest close in 3 weeks of the back of increased supply from the EU and Black Seas regions at significant discounts to the US offers. Continued improvement in the corn crop is expected to put pressure on wheat prices as corn returns to domestic feed rations in the US.

The cotton market has rebounded from the lows of last week, where mill buying supported the markets in the 83-84 US cent mark. The US crop is continuing with mixed fortunes. We have heard that significant numbers of hectares are being written off for insurance in West Texas, due to drought, whilst on the other side of the country, crops have been inundated by wet weather resulting some expected crop damage.

The Aussie has jumped up to around the .9250 level following the Peoples Bank of China policy revision yesterday regarding lending to small and medium size businesses. This loosening of lending policy is expected to increase demands for imports of raw materials into China from key trading partners, of which Australia is a major contributor.

New crop prices are continuing to hover around the $290’s Newcastle and Brisbane track, with old crop wheat prices continuing to hold  a $10 – $15 premium. Homes to place sorghum are become very hard to come by, making selling from the bulk handler, or ex-farm extremely difficult, with high moisture sorghum even harder to market. We have interest in new crop faba beans, both ex-farm and delivered packers in both NSW and Queensland and would like to take offers from any keen sellers. Chickpea demand has continued to be non-existent during the Ramadan period. Traders have been telling us that new crop prices for chickpeas will be significantly lower than last harvest as the subcontinent work through a massive oversupply.