Grains saw gains in overnight trade with wheat leading the charge. The May contract was up 21.25 cents at 714.5US cents/bushel. US weather forecasts for a dry 10 day outlook and strong export inspections were the main driver of this upside. This strength spilled over into corn and the May contract saw gains of 11 cents to finish the session at 490cent/bushel. Soybeans were also up and the May contract saw gains of 16.75 cents in overnight trade. Although the USDA weekly export inspections came in below expectations, a strong demand for soymeal and strong crush margins saw beans find strength.

Locally, today the grains market has a softer feel to it. The delivered markets for feed grains are off $5-10/mt and consumer demand is minimal. Offers remain at levels we saw trade last week but bids are almost non-existent. We believe values to still be around $320-330XF border region for 70/10 wheat and sorghum at $300XF border region. We do have homes for SOR2/SOR3 and SORX.

With a strong basis and domestic values keeping grain onshore, we have still been keeping an eye on offshore protein markets. Current demand for Aussie protein wheat from the east coast that will work into south-east Asian markets is thin, with the run-up in futures making our wheat too expensive for their requirements.

Cotton futures overnight traded to a high of 93.75cents on the May contract but found resistance and finished the session down 268 points to close at 90.63cents/pound. This has converted ECOM’s cash prices to $514/bale today after reaching $532/bale yesterday. While ever futures remain above 90 cents, we expect Mill demand to remain quiet.

Rain received in the past week is a double edged sword for cotton growers. Whilst providing those with some relief for winter crop programs, this is the time of year most are looking to defoliate and commence picking.