In offshore markets overnight we saw July wheat fall 2.75 cents to close at 638.75 cents with expectations of large crops from the Black Sea and the EU this year. Corn was up with the July contract finishing at 472.5 cents, up 2.75. There is still support to the corn market with some concern that areas of the northern corn belt not getting planted due to persistent wet weather. Soybeans were up 9 cents to finish at 1497’6 in overnight trade.
We are still seeing demand for SOR1 in the system for May transfer. Once May passes, the delivered numbers into Newcastle indicate that track values will more than likely be sub-$310/mt. Because of this, we suggest that anyone who has uncommitted SOR1 in the system to contact us and give serious consideration to pricing today and tomorrow. Currently, bids range from $335-340/mt track. We are seeing SOR with stained grain up to 20% bid in the high $270’s delivered Tamworth and the high $290’s delivered Newcastle. The problem is, the majority of homes are for Aug/Sept delivery and it is difficult to move large parcels of grain in June/July. Small parcels of 1-200mt may be moved during the next two months but consumer demand is minimal. SORX in the north is bid around $250XF for anyone still holding parcels of this quality.
We have continued demand for all feed grains in NSW and delivered Downs 70/10 markets are ranging between $370-375/mt delivered for June/July delivery. Given the ongoing weather concerns, most growers are selling small pockets of grain for spot delivery and unwilling to commit to selling on a two month spread. New crop values continue to sit around the $330+ delivered Downs. For growers in the north/border regions we believe $300-305/mt XF is achievable for 70/10. This does represent good selling levels if you are willing to take on the production risk. When comparing this to a track MG contract, we estimate these to equate to $277XF (using a $20/mt freight to get it to Goondi site) for APW and a $5-20/mt discount for any AUH/ASW. Aussie wheat is too expensive in international markets and our basis remains extremely strong due to the ongoing drought conditions.
Barley demand is fairly weak, with only 1-2 buyers of old crop barley in the market at the moment. There are still large volumes of ‘cheaper’ barley moving into northern markets from SNSW and a vessel into Brisbane that has been bought around from SA recently. New crop barley is being bid in the $305-310/mt delivered Downs market, which is about $20/mt below new crop wheat.
Old crop chickpeas are being bid at a $460-465/mt delivered Downs and $440-445/mt delivered Narrabri. New crop chickpeas have been bid at $470/mt delivered Downs for months now. We anticipate large areas of chickpeas being planted this season in the north as they seem to tolerate a dry season fairly well. This planted area (assuming there is a crop to harvest come Oct/Nov), combined with the large volume of old crop chickpeas still held by growers could send chickpea values lower. Of course, we all know pulse markets to be extremely volatile at times and anything is possible.
Anyone still holding faba beans from last harvest are finding them difficult to place with no demand at the moment. We usually see demand stem from the New England/Tablelands during the winter months but for this to happen we need to see a few heavy frosts and the weather to turn cold. At the moment, graziers seem to be getting by on what ground coverage they have, or had previously reduced stocking rates due to the dryness.
Cotton overnight closed 10points lower on the July contract, as it has in the past 14 of 16 trading sessions. Rains received in Texas over the weekend have the market expecting areas that were previously considered for abandonment to pull through. This has added pressure on the new crop December contract and as a result the inverse from July to December is now out to just over 7 cents/bushel.