With our country enjoying a well earned long weekend, we have hit the ground on Tuesday morning, with little change in the grains and oilseed markets since last Friday. Wheat has continued its downward trajectory, losing 6.5 USc/bu overnight. Good international wheat trades seemed to be the one thing stopping the downward momentum from picking up with local wheat featuring in another middle eastern purchase, and the logistics of moving wheat in the frozen Midwest of the US making prompt wheat from US ports harder to execute. The corn market has continued to trade in a sideways path, with a standoff on the GM corn issue in China looking to come to a conclusion shortly, whilst soybeans continue to try and find an appropriate level to trade, with prompt demand keeping prices much firmer than is expected, given we are closing in on the record South American harvest.
The cotton market was hit hard overnight, with the protection of capital seeming to be the most concise explanation for the almost 300pt move on the March contract. With the market trading sub 85USc/lb we may see support come back to the market, with mills that bought cotton on call looking to finalise their positions at a more profitable level.
Our currency has ridden the rollercoaster over the last couple of sessions, which saw it break into the 86 cent range, before promptly heading back to 87 cent levels of today. The RBA meeting next week is closing in, and it will be the first time we get some concrete direction for our dollar from our domestic currency house.
The domestic markets have continued where we finished off on Friday last week, which saw the forecast for rain in Southern Queensland, eventuate somewhat, and $15 dropped from the market. This rain event isn’t going to help sorghum which is currently being harvested, and its still a long way to the next winter crop. Without further rain soon, the market will look to make back all of the losses and some as growers resist selling. Sorghum has remained firm, with the merchant short Sorghum 1 to complete commitments, whilst growers have been delivering lower grades to on farm storage to weather the prompt market storm. Chickpeas has continued to hold their stronger numbers, but as we alluded last week, any forecast for improvement would see this market retreat rapidly.