The wheat and corn markets consolidated overnight following the rally last week on the back of increased tensions between Russia and Ukraine. The release of crop conditions after the close today had the market guessing, resulting in a mostly unchanged close, despite trading an 18c/bushel range for wheat,and a 7c/bushel range for corn. The winter wheat crop tour is currently underway across the Midwest US, and will hopefully shed some more light on yield expectations of both drought and possible frost affected crops over the next few days. Wheat crop conditions, dropped 1% to 33% Good-Excellent, whilst corn plantings jumped up to 19% over the course of the week, but remains well behind the 5 year average of 28%. The International Grains Council also released a report late last week which placed world production of wheat at 697mmt and corn at 950mmt, both down significantly from the record productions of 2013, which has been seen as supportive for prices. The soybean market has put on close to 40c/bushel since last week for prompt transactions, on the back of dry equatorial conditions putting pressure on Palm oil production in Indonesia and Malaysia, whilst talk of soybeans picking up additional area due to the slower start to corn planting is putting some pressure on new crop futures.
The cotton market lost ground overnight, following a 5thstraight attempt to try and breach the resistance level of 93.52 USc/lb. The invert to July has dropped back to 949 points, with planting pace in the US reported at 13% against a 5 year average of 18%, continued drought conditions in West Texas, and a decrease in Chinese production helping to support the new crop contracts and close the gap.
The dollar has slipped to the bottom of its recent price range, in the 0.92’s on the back of improvement in the US Pending Home sales data for the first quarter, and concern around the continued Black Sea conflict which has seen the US dollar rise. The US Federal Reserve meeting, non-farm payroll are the big ticket items for the rest of the week.
Local prices for wheat and barley are mostly unchanged from last week, while sorghum is a little softer. New crop prices for wheat and barley are remaining firm with the domestic focus in Brisbane and the north of the Newcastle port zones still under pressure from a far from assured winter crop planting. Time is on the side of the grower at this stage, but another good rainfall event is needed soon. The window for planting Faba’s and Canola is closing rather quickly in the north, and we still have interest in buying these with both fixed tonnage and hectare contracts.