It was a disappointing session in Chicago overnight, with the Wheat market coming under fire from the cancellation of two shipments into Egypt, which will ultimately filter back into the US balance sheet, if the sale cannot be replaced. Traders remain concerned for the development of the new crop in the US, as we reach the end of the Northern Hemisphere’s winter, snow melt is starting, but further cold weather is expected, and could likely damage freshly exposed area of crop. The corn market is remaining on a upward trend, unrest in the Ukraine, is pushing sales back to safer markets including the US, whilst feed and ethanol demand in the US are both seen to be supporting price also. The soybean market also keeping an upward trajectory with delays in Brazil, and some reports from both Argentina and Brazil, which estimate production to be short of the last USDA projection.
The cotton market lost ground again overnight, in what has continued to be commented on as still being profit taking. Repositioning may be a better way to describe the feel of the market, with the spinning mills coming back into the fray as we head back towards the 85 USc/lb level. The July to December invert has also come back under the 1000pt mark, but the final mark is going to be determined by the actual planted area in the Northern Hemisphere for new crop, and China’s domestic policy moving forward.
The Aussie dollar feel under 90 cents again, but there really is no clear direction to its current behaviour. For the most part, the grains market is not taking notice of this erratic behaviour, whilst it is still a factor in cotton pricing, basis and futures movements are more important.
The local market looks similar to our last report. Very little change to report, wheat has increased a dollar or two, and the track market Bellata north is showing some of the best numbers all season, whilst barley is still around the same numbers. Sorghum harvest is wrapping up around Narrabri, and we have had some limited interest in off grades SOR2/3/X into the packers, but this could be filled quickly. The pulse market remains very quiet, and uninspiring.