The US markets were closed overnight for the Memorial Day holiday, but have opened down this morning, continuing to slide lower from last week’s close. Crop conditions and planting progress reports will be released tomorrow, but are expected to show sharp increases in planting pace for Corn and Soybeans.  Wheat conditions are not expected to improve dramatically, but the rain falling across the US Midwest is more than likely to stem the downward spiral of recent weeks. The grain markets are lacking any real bullish news, the Ukrainian/Russian conflict seems to be coming to a more peaceful conclusion, European grain production looks reasonably secure and the US renewable fuels mandate does not appear to be reduced as harshly as first expected given grain production looks secure.

The cotton market is all bearish losing more than 350 points last week. Certified stocks are continuing to grow, with more than 430,000 bales now in USDA warehouses.  Rain in West Texas, the best falls in over 12 months in some places has helped to pressure the new crop market given an El Nino event will likely see the chances of a big dry land crop (1.3M hectares) now coming to fruition.

The Aussie dollar has traded in the 0.92’s so far this week, but looks under pressure from the continued speculation about the possibility of increasing the speed of tapering the US economic stimulus. Last week’s RBA minutes pointed to continuing hold on local interest rates for the foreseeable future, and improvements in the US economy could see our currency hurt by investors chasing higher yields.

Locally, the forecast for rain has appeared yet again, but at a week out, anything could happen. The nearby markets for domestic grain is holding its breath, wheat having lost ground on last week’s prices while barley and sorghum remain around the same numbers of last week. Track sorghum in Newcastle was full of fireworks last week, but this seems to have settled down quickly. New crop wheat is back from the best numbers seen before planting, with basis between $70 and $80 on for track APW, this is also being reflected in strong ex-farm numbers for new crop 70/10. We still have hectare contracts for faba’s and we have also seen a couple of chickpeas buyers releasing  hectare contracts that are worth considering.