Fact of the Day – The red of the Chinese flag symbolizes the communist revolution, and it’s also the traditional colour of the people. The large gold star represents communism, while the four smaller stars represent the social classes of the people.
The summit in Vietnam last week ended abruptly, as Supreme leader Kim and Trump were unable to come to an agreement on accelerating nuclear disarmament, for now. Though there was some good news to come out of the media circus, Trump tweeted that progress between China and the US on trade negotiations was moving very swiftly and smoothly. This news played its role across world markets, with futures and physical commodity prices rallying in wake of a profitable agreement for both parties being negotiated. The AUD opened today at just a slither under the $0.71 mark.
Now a full week in to March, forecasts still are predicting very little to no precipitation, which also coincides with at least another 7-10 days of 35 degrees or higher. As summer crops are coming off, whether it be Cotton or Sorghum, the already slim idea of a winter crop is getting more and more scarce as any autumn rain seems unlikely at this point in time. Feed markets remain the driving force behind any movement of grain throughout SQ and NNSW, with wheat, barley and sorghum just softening late last week and only making slight gains over the past few days. Pulses are at a standstill across the board, as now we can only wait till our product is sought after by the overseas buyers.
Once again, we have watched cotton futures and bale prices see saw over the past week, this really is only based on the knife edge that is the US and Chinese trade war. We saw a fluctuation of $5-10/bale throughout the past few days, though there remains little selling interest as production uncertainty continues to take its toll on growers marketing plans. Prices today for seasons ahead stand at 2019 $608, 2020 $590 and 2021 $545 (at time of writing).
Fact of the Day – The Sun accounts for 99.86% of the mass of the Solar System. You could fit 109 Earths side by side to match the diameter of the Sun, and it would take 1.3 million planets the size of the Earth to fill it up.
We look to Vietnam as the world watches the strange security measures some world leaders have in preparation for this week’s summit. The supreme leader and Trump will be at the top of the list for intrigue as they continue to make headway on nuclear disarmament, China will be second to tune in for as they talk trade negotiations. Currencies have had a moving week with the US dollar dropping away, the Aussie dollar made modest gains on the back of this news. Today the dollar opened at just under the $0.72 mark.
The month of March is tomorrow, and even more pleasing, Autumn. Although the forecast doesn’t look too different, here is hoping the cooler and wetter days are only just around the corner for all. Going off just the last two months, not much change has occurred on the grains and feed front. Demand is still rampant across the eastern states for anything that is edible and that will produce energy for struggling lot feeders and graziers. Sorghum has had a deflating week on the back of last week’s gains, though the demand for top grade is still very much there, as the season has produced higher percentage screenings than previous years. Pricing is floating at $340-50 XF Moree and Narrabri subject to location, with bids improving heading south. Pulses are still not worth the comment due to their demand being next to none, bids looking around $760/mt Downs.
Cotton continues its lacklustre form as it struggles to find its place on the back of trade negotiations and US planting estimates. Last week we saw bale prices jump by about twenty dollars, though that has now subsided, and pricing is back to sub six hundred levels. Picking across the area will be in full swing over the next few weeks around the North West, as cotton continues to battle the woeful conditions. Prices today for seasons ahead stand at 2019 $590, 2020 $585 and 2021 $545 (at time of writing).
Fact of the Day – If the U.S. was to cut its military budget by 75%, it would still have the world’s largest military budget.
The week started off slow as the US markets had the Monday off to celebrate President’s day. Over the last few days there has been positive signs as continued negotiations across the Pacific make progress, the two agreed on making currencies more stable. Though this seems like it will only be another task on the to do list to renegotiate as time goes on. With this news, we saw the Aussie dollar climb due to our own international interests with China. The dollar sits at $0.718 to start the day.
With the weather forecast reporting subdued temperatures to end the week, there is still nothing promising to fall over the next fortnight. Though all eyes are on the tropical cyclone for now, as it could very well turn and provide some decent moisture across SQ and NNSW, fingers crossed. Feed is still sought after from every corner of the eastern states, vessels also continue to make their way around from the west as the costs to consumers continue to tick over. Sorghum has rallied over the past few days with buyers looking to take tonnes in every direction across the state and still only being able to source it from the north, at this stage. We expect the plains to get started over the next 2 weeks, however how their yields and quality will compare to the northern crops will be interesting, as this will also play a part in domestic and port zone prizing going forward. Pulses have had little change this year, as we etch closer to Ramadan, it becomes more worrying that the overseas buying will not come till the post fasting period in mid-June. At the moment, there is many factors contributing to their markets abroad and it leaves Australian exporters and sellers sweating on their tonnes needing/wanting to be moved.
As stated earlier, the public holiday gave the markets a slow start to the week of trading, though since then Cotton has edged slightly higher on current trade war news. Prices today for seasons ahead stand at 2019 $586, 2020 $585 and 2021 $545 (at time of writing).
Fact of the Day –No single hour in any other country sees as many tonnes of fireworks set off as China does at midnight to celebrate the Chinese New Year. 2019 kicks off as the year of the pig.
Finally, the USDA were able to release their report on where global supply and demand estimates sit over the past two months. In the US, reports revealed that the planted wheat was down on where the market first suspected late last year. For the futures to react more hastily, there will need to be more evidence to support the minimised stock outlook heading in to the 2019 season. “The US have now cut their wheat planting by more than a quarter in the last five years” (T.Gorey, CBA). With the government shutdown looking to not repeat itself, the slow pace of negotiations between China and the US are becoming more and more concerning from the markets point of view. The summit in Vietnam in the coming weeks will also play its role, especially as the world watches Trump and Kim Jong-Un play nice for the second time.
Feed grain focus is all but changed, sorghum 1/2 still very much in demand, and cereals are being moved load by load for lot feeders and graziers around the region. With forecasts showing nothing but wind, heat and dust, we don’t expect the demand in feed grain as well as the pricing to soften soon. Chickpeas are quiet across the board, buyers have been out of the market for some time now with overseas demand at a near standstill. Crops abroad aren’t faring well, though their demand is also very low, meaning if they can get close to covering themselves with domestic chickpeas, our peas may seem like they are not desirable for a little longer. The Indian election could be the turning point we desperately need in the coming months.
Cotton futures saw some positive gains to start the week, though they took a sizeable fall off the back of the USCIA data. The US cotton industry association stated that there is set to be a 3% increase in planted cotton for the 2019 season. This gave bale prices here at home a disappointing drop, though at the moment there is very minimal interest in selling due to production uncertainty and the horrific season being faced across eastern states. Prices today for seasons ahead stand at 2019 $585, 2020 $585 and 2021 $545 (at time of writing).
Fact of the Day – As of Monday, the New England Patriots claimed their 6th Super Bowl Championship in the last 18 years. The only two men to have been there for all of them since day 1 are Head Coach Bill Bellichek and Quarterback Tom Brady, whom is still playing on at a young age of 41.
As of this week, the USDA is running around like a headless chook attempting to assemble the necessary data to inform the rest of the world on current supply and demand estimates from the last month due to their absence. As President trump has now ended the government shutdown, this Friday evening will bring the conjoined report of the last two months, hopefully shedding some light on recent crop progression, sales and purchases as well as how trade talks are continuing between the two heavy weights. The US markets will be unsettled to end the week as they react to Trumps second state of the union address. From most aspects it was quite positive, even with democrats giving Trump and America a standing ovation for how they have progressed in the last 100 years. As I have said for many a month now, all eyes will stay focused on China and North Korea in angst of their next meeting in Vietnam later this month.
Sorghum still remains at the forefront of current demand across the board. Pricing is ever moving as more and more intel comes through touching on high screenings, low test weights and total crop yields. From the Narrabri area all the way to the border, ex-farm business is being booked at the $350/mt level, with premiums also going forward for prompt loads. Sorghum 2 is bid between $10-$20/mt less depending on specs as some buyers have more leniency on quality than others. The market is now watching closely to how the Liverpool Plains crop is progressing, early reports look bleak as the heat over the past 6 weeks has been unforgiving. Top grade sorghum will be chased hastily in an attempt to pull tonnes towards the Newcastle market zone, as well as the southern areas of NSW. Wheat and barley still are sought after, though the ever-climbing price and decreasing local stocks is only making times tougher across the eastern side of the country.
Chickpeas still are very quiet to kick off February. We do expect more activity in the coming weeks, especially from the smaller buyers whose crops are doing it tough (Pakistan, Bangladesh). The period of fasting (Ramadan) is a fortnight earlier this year, so here is hoping they look to replenish their inventory over the next 6-8 weeks to boost our market prices here at home.
Cotton futures have had about equal losses to gains over the last week coming in even. The shutdown has not helped in this regard though, with data to be released in coming days, this should alleviate a small degree on market uncertainty.Prices today for seasons ahead now stand at 2019 $590, 2020$590 and 2021 $550 (at time of writing).
Fact of the Day – He gripped a tennis racquet for the first time when he was just four years old. Therefore, it’s no surprise Novak Djokovic has just won his 7th Australian open and 15th Grand Slam title at the age of 31.
With the US government shutdown now at an end, this allows the USDA the freedom to finally report on the global estimates and supply on February 8th after a long hiatus. This information will be critical as it will feed the trade on the progression of global agri-commodities over the last two months as they have since been reporting with minimal data to go off. Whilst we wait on the WASDE report next month, weather has been the main focus over the US, extreme cold and unseasonable heat looks set to hit the winter wheat causing some significant plant demise if as serious as forecasted.
Sorghum demand is rampant as more and more starts to be stripped from Narrabri heading north. High screenings and low-test weights continue to be a disappointing factor in an already dismal season, though the demand still remains. Narrabri to Moree areas are bid at $345-$350 ex-farm (less $15-20/mt for SOR2), with delivery options also available. Buyers are also looking for Sorghum cover out to April and May. Delivered Newcastle market zone is bid at $395, though it is very much a sellers’ market as later planted crops look only to be more scarce quality wise, bringing more focus to the current grain coming off. Domestic demand against export demand is very much the same, though the export market will continue to watch closely at China’s demand for sorghum and their current uneasy trade talks with Trump. With sorghum, we will also see a lot of straw and hay being cut and baled, this with the continued market demand for roughage by feedlots and graziers will be another cost-effective avenue some poor performing crops can take advantage from.
Cotton futures made modest gains before the long weekend and have really seen no change since the start of the week. There is still high demand for bales, though production uncertainty is a major factor for growers as the risk of more forward selling is just too much of a gamble at this dry time. 2019 bales have been trading at $600 over the past fortnight. Prices today for seasons ahead now stand at 2019 $590, 2020$590 and 2021 $550(at time of writing).
Fact of the Day – The NFL’s popularity is even more remarkable when you inspect the fare it has to offer each week on television. An average professional football game lasts 3 hours and 12 minutes, but if you tally up the time when the ball is in play, the action amounts to a mere 11 minutes, earning the star players upwards of $1.5 Million per game.
To start the week international markets were subdued as the US celebrated Martin Luther King Jr. day. Since the initial Trump/Jinping talks late last year, the respective economies as well as invested others, have been keeping a close eye on when possible purchases of US agri-commodities would occur. There has been murmurs this week on wheat and cotton, though only time will tell on how this will affect world trades in coming days. Though it is also said that the US has declined an invitation from China for preparatory trade talks. Across the Bering sea, Russia is rumored to be taking a forward step on their domestic demand in a bid to establish better market parameters. The Aussie dollar dropped over night to $0.713 on the back of Chinese market uncertainty.
January’s only saving grace around NNSW and SQ has been the late evening summer storms. Even though temperatures still push the envelope at the 40-degree mark, some decent falls have been received to give the slightest encouragement to already struggling crops. Domestic users and exporters are itching to know more about early sorghum being harvested, as securing tonnes is crucial considering the minimal production across the eastern states. Pricing on the sorghum front remains firm, especially with the continued heat taking its toll on the later planted paddocks. For delivery $365 Downs, $380 Brisbane MZ and $385 Newcastle MZ are of continued interest. Though the domestic demand has seen ex-farm prices become more enticing also at $345 Narrabri/Moree area and $355-60 XF Liverpool plains for April. Test weight and yields continue to be a worry, though bigger concern is for later planted sorghum, as it just doesn’t seem possible for it to hold on for 2-3 more weeks of current conditions.
On a feed market note, there has been a continued increase in interest in niche alternatives for stock nutrition. Palm expeller, Lupins, Canola meal, Oats, Beans and Maize have all been sought to reduce the impact of high feed prices, but also to gain as much nutritional value as possible to maintain livestock quality in these dire times. Not too much to say on Chickpeas this week, traditionally January is a quiet time, and this year is no different. Pricing dropped to start 2019 by about $20-$25/mt sitting at $650, though we expect to see activity improve over the Feb/March period as reports continue to outline poor crops in Pakistan, Bangladesh and Middle east.
The government shutdown in the states has really slowed down the global economy on multiple fronts. When talking cotton, the closure of the government reduces how much global supply data the market has access to, generating a degree of uncertainty. Therefore, the sooner it ends, the sooner we possibly can see some positive changes. Crops here at home are under immense pressure from the weather producing relentless winds, hail storms, and heat to go hand in hand with irrigators possibly not having enough waters left to finish the season adequately. Prices today for seasons ahead now stand at 2019 $590, 2020 $590 and 2021 $550(at time of writing).
Fact of the Day – For the 2019 Australian open, the top three seeded men’s players are unchanged from the 2009 open, the three champions being Roger Federer, Rafael Nadal and Novak Djokovic.
The heat in the last week, as well in the coming days is taking its toll on everything, with the pressure the crops are under more than evident. With the North West and Southern Downs facing 5-6 days over 40 degrees, there hasn’t been, nor will there be, any respite as we approach the end of January. What we are facing is historically no different to any other start to the year, though the main factor is that the region has not received sufficient rain in over a year to be able to tolerate the harsh summer conditions. Sorghum pricing continues to firm day by day, with the main driver being the production uncertainty, paired with current temperatures. Delivered in to Brisbane/Downs prices sit at $375/$365 with ex-farm bids floating at $335-$345 dependent on location, mostly around the border regions that are set to harvest soon, if not already. Early reports of quality seem to be a little light, as we didn’t receive the final finishing rain, some crops are looking to float between sorghum 1 and 2, though this will be more telling as more growers get in to the paddock.
Domestic demand around the Darling Downs is becoming a little thinly stretched as there continues to be delays coming out of the western ports, for now the short-term fix is pulling grain up from NNSW and having to pay a heightened price from where the market stood at the end of last year. Feed wheat on farm is bid between $445-455 dependent on location. Nothing exciting has really changed in the last week on the cotton front, except the pace plants are deteriorating in this scorching heat. As well even though the super powers of the world have been talking, there has still been no beneficial outcome worked out yet regarding workable trade agreements. Prices today for seasons ahead now stand at 2019 $585 and 2020 $585 (at time of writing).
Fact of the Day – With news of his recovery, the man himself Michael Schumacher is the only driver to ever win seven F1Championships, five of which he won consecutively. According to the official Formula One website, Schumacher was “statistically the greatest driver the sport has ever seen” at the time of his retirement from the sport.
2019 has picked up exactly where 2018 left off, hot, dry and windy, the mercury is also forecasted to sit above 36 degrees for at least the next 10 days. The heat will not so much affect the sorghum looking to come off this month, but more the areas that were planted over the late November/December period. Rain obviously isn’t imminent and as you drive around, dryland cotton and sorghum seem to be putting up their last stand in this heated fight. Domestic grain demand is still very much rampant as buyers looking now for coverage through to April, prices also have firmed with port delays in the west holding up shipments in to Brisbane, thus creating a slight short of feed grains around the Darling Downs Market zone. International news has been quite dormant over the last three weeks, this can be put down to market closures, festive period and as well the elephant sitting in the states, the US government shutdown. The “Mexican standoff” and shutdown looks to end soon, though US-China talks are also underway, with president Trump tweeting earlier this week “Talks with China are going very well” so this could see a well needed market spike to get the year back on track.
Prompt sorghum for January and February is very much a sellers’ market, as buyers look to secure tonnes immediately. Delivered in to Brisbane/Downs prices sit at $370/$355 with ex-farm bids estimated at $330-$340 dependant on location around the Moree and Goondiwindi areas. Feed wheat is comfortably sitting at $445 XF Narrabri north, with shorts evident coming out of 2018 and F1 barley is $25-35/mt lower than wheat. Chickpeas are still quiet, and January has always been traditionally calm before the buying storm. With the sub-continent and surrounding countries crops not faring well either, we expect to see heightened demand come Feb/March. I do believe the next 4-6 weeks will be telling as the Islamic nations look to stockpile before their fasting (Ramadan) at the beginning of May, as well as their yields nowhere near meeting expectations. Hopefully 2019 brings positive light to a pulse market that has been dark for near 18 months. For now, the Downs market zone is bid at $890 for new crop and Narrabri $875/mt.
Cotton is and has been quite dismal to say the least to start the new year, prices here at home have dropped away by about $25/bale since Christmas. America’s government troubles haven’t been helping, though as said previously, more trade talks can only be beneficial… well here’s hoping! Irrigated cotton continues to fair well, though dryland crops that already took a sand blasting last month are looking to continue deteriorating rapidly with no drink in sight. Prices today for seasons ahead now stand at 2019 $590 and 2020 $580 (at time of writing).
Fact of the Day – During the 2010 Christmas season, the Colombian government decorated jungle trees with lights. The trees lit up when the guerrillas (terrorists) walked by and banners appeared asking them to surrender their arms. The campaign convinced 331 guerrillas to re-enter society and also won an award for strategic marketing excellence.
Pandemonium, apocalypse like and chaotic is probably how you would best describe the last week of weather faced across most of Queensland and New South Wales. To start, central and NNSW faced a massive dust storm accompanied by winds clocked at over 100km/h which saw top soil head to NZ, though this did bring some heavy rain, with many receiving anywhere from 10mm to two inches. Throughout parts of the Darling Downs, they experienced up to 300mm (12 inches) in only a matter of hours on Sunday with FNQ copping more than double that thanks to tropical cyclone Owen. Now the scattered rain was better late than never, though how it has impacted summer crops, whether it be positive or negative will not be truly evident until we enter the New Year. This seasons also at many differing stages for most due to intervals of moisture and the increasing mercury over the past 2 months, we expect to see Sorghum coming off as early as Australia day, then from then on.
Due to such a short and dismal season, the usual supply for feed grains during harvest has dropped away considerably, though there is still plenty of demand for lot feeders and graziers looking to gain cover for January out to March. Due to recent rain, Sorghum prices have dropped away in anticipation for increased production, though Barley and Wheat are still quite strong as futures gained across the international market this week. With low east coast production, we still will look to the port prices of our Western Australian and international sellers. Protein wheat delivered NNSW is bid at $450 heading in to January with feed wheat at $435-40 and F1 $400 ex-farm depending location. With majority, if not all receival sites already running on a skeleton crew, we recommend checking with all buyers on their logistics over the festive season on whether they are open or closed over the holidays until 2019.
As commented on over the last few weeks, there is still really no immediate change in the Chickpea market. We hope to bring heightened prices and overseas demand in 2019 for the Downs/Narrabri market zones, warehoused and ex-farm old and new crop product. Stats show that in February and March we ship over 100kmt to Bangladesh, this is looking to be the same for 2019 due to poor conditions abroad. Cotton has dropped away this week on the market front, though we do not expect too much change until the US and China start behaving properly. Prices today for seasons ahead now stand at 2019 $605, 2020 $590 and $540/bale for 2021 and 2022 (at time of writing).
From all of us at AgVantage Commodities, we wish you a very Merry Christmas and a Happy New Year.