Robbo's Grain Watch

Rain Changes Feedgrain picture

Fri, 07 Oct 2011 01:26:00 GMT

Excellent rains this week have given winter crops a good drink with parts of NSW and Queensland benefiting from widespread falls.

In Southern Queensland St George, Goondiwindi and Mungindi recorded 25-30mm while the Darling Downs had lighter falls of 5mm. In NSW Narrabri had 40mm, Moree 36mm, Tamworth 47mm, Gunnedah 43mm, Coonabarabran 50mm, Dubbo 60mm, Trangie 39mm Coonamble 45mm and Walgett 25mm. This rain will help fill wheat crops and secures production for growers.

The rain along with macro-economic global factors like the economic basket-case in Greece has put downward pressure on grain markets.

Currency is also playing a role with the AUD moving within a 10c range in the past fortnight. It is currently sitting at 0.9764. This has opened some grain export doors although buyers are watching markets fall and waiting.

In the US winter wheat planting is been effected in the southern parts by dry conditions where the drought is persisting and causing concerns.

The US corn harvest is in full swing with mixed yields reports. The recent selloff with corn futures in the last month of $1.50/bushel equates to about $60 per tonne AUD, which could result in increased demand for corn as ethanol consumers and lot feeders take advantage of the recent selloff. Watch this space as reports of yields transpire. Domestically we have not seen the same price decline as the fall in the Aussie dollar offsets some of the US futures decline.

Feed wheat delivered Darling Downs November/December has been trading at $245 delivered. Feed wheat delivered Goulbourn Valley October is $212; delivered Newcastle $238; and Liverpool plains $225. Barley on the downs has not seen a lot of support and is trading at $238. Sorghum has also been under pressure and is trading around $230 delivered downs for October. The grower has held this market up well with only limited selling. With more rain forecast sorghum may have more downside, however this could Corn futures could have some upside which may offset this.

Australian Grain Volatility

Fri, 24 Jun 2011 03:52:00 GMT

Old crop Russian wheat been offered aggressively lower , this on the back of funds being aggressive sellers of all commodities has resulted in Australian milling wheat values being sold off over $40 per tonne this week.

Stats can lowered its wheat area by 460k ha from the April report but most expected this reduction to be much higher.
All of this has resulted in a negative flow of trade through our Grain markets.

Have a great Weekend

Robbo

Market Wrap June 3rd 2011

Fri, 03 Jun 2011 05:08:00 GMT

Market Wrap

Wheat, corn and soybeans stronger largely on fund buying. Weather forecasts point to ongoing wet conditions through the US Northern Plains, Canadian Prairies which will further hamper late planting.

European weather pattern is wetter which will help to stabilise winter crops.

Weekly US ethanol production was at a 10 week high and points to an upward re-adjustment in the USDA ethanol production forecast. There is no sign of old crop rationing there.

Informa forecast US winter wheat production at 1,421 Mil Bu, vs. its forecast of 1,441 Mil Bu in May and the USDA’s projected 1,424 Mil. HRW production is estimated at 764 Mil and SRW at 422 Mil. They forecast EU wheat production at 135 MMT. The HRW production implies a yield of 35.5 bpa and the SRW at 62 bpa. Other forecasters have the US winter wheat production below 1.4 bill bu with lower yields in the Southern Plains and losses in the SRW due to the flooding in the southern Midwest.

Corn - Dec corn did hit new contract highs on Thursday and is now poised to break the $7 level. Weather in the eastern corn belt has allowed rapid planting this week. Managers and merchandisers say 60-80% of the corn crop will be planted by Sunday in Ohio and 80-90% should be complete in Michigan. Basis is still very strong across most of the corn belt although there are several reports of truck lines in the central/western belt as farmers and elevators clean out bins to evade the inverse and reward the strong basis.

Wheat - From Friday’s high to Wednesday’s low, July wheat futures lost 73 cents and perhaps more significantly, wheat became much more competitive with corn for feed. So a correction on Thursday was really more technical in nature than anything else. Informa did come out with a slightly lower US wheat production number of 1.421 billion bushels, and they lowered EU production by 5.4 MMT from the previous estimate due to the ongoing drought conditions in several parts of Europe. SRW yield and quality reports in southern areas are generally very good, and while there are some concerns about quality in the wetter parts of the Midwest, most traders are still confident that the crop we’ll harvest in about a month will be quite good.

Australian old crop prices continue to lag as demand into most destinations remains tight and export container business slows due to higher Australian Dollar and south east Asian buyers looking for lower values. The reopening of Russian export program from 1^st July has pressured the market although offers out of this region don’t seem to be as low as many expected and this could bring buyers back to the table for Australia wheat which could in turn help stabilise values here.

See you in Toowoomba if you are around

Robbo

Toowoomba Field Day June 2011

Fri, 03 Jun 2011 03:06:00 GMT

Looking forward to seeing everyone at the Toowoomba field day make sure you drop past for a sausage sandwich and a chat .

Market Wrap

Mon, 30 May 2011 02:30:00 GMT

CBOT wheat, corn modestly lower and soybeans steady in light volume as profit taking was evident across the grains complex as traders look to book profits following the recent run up.

Macros were mostly negative with crude ending lower on weak US housing sales and comments from the EIA to the effect that high crude prices is hurting demand. Firm cash markets across the US are providing support for futures but markets will need more adverse weather to keep pushing higher with prices already at historically high levels. Weekly US export sales were better than expected for corn and wheat. Strong new crop sales were evident for wheat. Weekly corn sales were the strongest in several weeks.

EU weather forecasts took rain out in the next week but added it in the second week. Production forecasts are being lowered and they need rain.

No more rain across WA in the past 24 hours but there has been 20 mm across much of the northern and eastern wheat belt this week which will see most of the crop planted in these areas which would account for close to half of the states wheat area. Falls were lighter in the Great Southern and they need more rain.

Corn – A setback today as market marking time - the December 11 contract has seen only a 63 cent range (high/low from last Thursday). Support continues to come from wet forecast and planting challenges in parts of the corn belt. Ohio is the area that’s had major issues with excessive rain fall –North Dakota was struggling but is seeing activity this week. Corn export sales were decent at 33.2 mbu for old crop and 12.1 mbu for new crop. The trade range was 31-39 mbu. Old crop corn basis continues to be a topic in the trade. Yesterday there was Eastern Corn Belt basis trades of excess of +.50N for JJ and today it seems like that pressure is working into IL with processors and rail markets firming up.

Wheat - The wheat market seemed to catch momentum earlier this week as concerns over world weather surfaced. Parts of France and Germany continue to be dry and there is more talk of the dryness in Russia. Since Monday we have seen over a dollar rally in July futures. Including the overnight we had a 30 cent trading range today. Export sales were 4.7 mbu old crop and 24.7 mbu new. This was at the top end of the trade expectations. Wet conditions have led to a moderate/high risk for scab in some wheat growing areas of Ohio. Northern and Central Ohio are not at risk yet, but Southern parts of the state are at a critical growth stage and wheat should be protected with a fungicide application at flowering.

Australian Dollar: A strong rally in Australian equities was enough to support the currency from the outset on Thursday pushing it towards 1.0680 where it spent most of the Asian session. The market is prepared to buy the Aussie on any dips at the moment even as recent weaker-than-expected economic data suggests the pressure has eased on the Reserve Bank to raise rates when they next meet in June. During the offshore session, the Aussie moved to a low of US106 cents where the buying interest emerged once again, mainly due to softer-than-expected data releases in the United States. The Aussie opens at 1.0660 on Friday 20th May 2011

cheers Robbo