Well what a busy month May has been! Machines have been busy in paddocks with growers picking cotton, planting winter crop and harvesting sorghum. It’s fairly safe to say that picking is coming to a close in the north, and planting is slowing down in the border region with growers either completing seeding or grinding to a halt due to moisture falling away. Other’s are yet to get a planter in the paddock without more rain. Harvest has been a bit stop-start on the Plains region with small falls of rain creating slight delays and some paddocks just not wanting to dry down. There are generally two times a year that growers have conflicting feelings about receiving rain. Whilst we are in desperate need of rain, those still trying to harvest/pick summer crops are hoping to do so prior to significant rain. Most of these growers, however are also in need of rain to get winter crops wither planted or established.

Sorghum values were on a bit of a rollercoaster ride throughout May as we experienced quality and delivery issues off the Liverpool Plains. This culminated in a meeting at Spring Ridge on Friday (30th) where discussions were had around receivals, quality specifications, international versus domestic markets versus human consumptive markets. We are unsure which direction this is all headed but rest assured some changes are coming. Newcastle track values spiked to $345/mt during the course of the month due to growers needing to washout of existing contracts. Frustratingly, this was not due to production failure as they had the tonnes, but due to quality not meeting spec. By Friday afternoon all bids were pulled from all merchants as any chance of May delivery against ASX track contracts had expired.

Wheat values peaked at $375/mt delivered Downs & $383/mt delivered Brisbane on the 12th of May and ended the month at the lows of $360/mt delivered Downs and $375/mt Brisbane. Demand remains strong for any feed grain, with growers continuing to price into the spot market rather than deferred delivery. New crop sellers are thin on the ground with most unwilling to commit to production risk without another fall of rain.

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.

Chickpeas during the past month haven’t seen too much activity from wither the demand or the sell side. Values remained fairly steady and really only fluctuated by $5-10/mt. They ended the month at $460/mt delivered Downs for old crop and $465-470/mt delivered for new crop.

In cotton news, rains received in Texas over the last weekend of the month 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.  We may see some short squeezing of the July contract occur but don’t expect that any upside will be reflected via physical demand from the Mills. Basis ended the month slightly stronger, however most merchants are only looking to accumulate bales for June/July as they are unsure what will happen to the inverse as it draws July closer to dropping off the board and don’t want to take on this risk.