As we approach the end of July fears of hot and dry conditions having an impact on the performance of the US corn crop have now subsided, with much of the huge crop in the ground coming through the important growing period unscathed. The potential for yield loss early in the month saw the corn market strengthen with a weather premium, however as the outlook has changed to more benign temperatures with regular rainfalls the market has been in a steady decline, with the drop in prices overnight reaching new lows for the September and December contracts. Soybeans also had a negative night, with the August contract, representing old crop stocks, moving limit down as the market reacted to rumours China will be unloading their reserve stocks on the their domestic market, reducing the demand for the limited remaining stocks from the largest importer. The November contract, representing new crop, can be expected to experience some more volatility over the coming month, as August is important in the development of this crop where weather will again take centre stage. Wheat, on the other hand, only managed to make slight losses, with export demand providing support. Egypt walked away with 240,000mt from Black Sea countries overnight, on top of the 400,000mt bought by Algeria recently, while Iraq currently has a tender out.
Cotton has managed to make some slight gains, albeit still within the well-established trading range of the last several months. Buying from mills is providing support around the 82-83 USc/lb mark, and disappears as prices approach 86-87 USc/lb. The increase in prices was still an achievement in the face of a stronger US dollar, and results from the Chinese manufacturing PMI coming in at its lowest level in 11 months at 47.7, dropping from 48.2 last month. The expectation of a weakening Chinese economy, in association with some positive economic data from the US and strength in the US dollar, has seen the AUD drop almost 1.5 cents overnight after showing some resilience over the last week.
Domestically, the strongest performer in the market is new crop faba beans, with prices delivered in to Narrabri or Goondiwinidi holding at $400/mt for no. 1 grade and a discount of $20 for no. 2s. Fabas have benefited from recent rains after a slow start to the early sown crop, with many growers taking the opportunity to lock in some of their production at these levels. On the other end of the scale, sorghum prices have had a sharp drop after the market peaked earlier this month. Homes for borderline moisture are available ex farm, with prices Narrabri north and around Moree around $230-$235 ex farm. Old crop wheat prices seem to have plateaued at current levels after weakening over the last few weeks, while new crop prices are now holding in the mid $280s for Brisbane and Newcastle track. It is worth considering new crop pricing ex farm for growers in the north of NSW, with a flat price of SFW1 attracting $235-$245 depending on location offering an advantage over taking stocks in to the system and receiving up to $50 discount for similar quality grain. Please call the office with any enquiries.