Prices 150217

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With ABARE increasing the Aussie wheat estimate to 35.13mt we did see a little pressure on US futures overnight. It goes to show that rain makes grain. The previous record of 29.91mt in 2011 was well and truly smashed this year. The ABARE report also upgraded production estimates for canola +563kt to 4.14mt and barley +2.77mt to 13.41mt. The old barley record was 10.38mt.
These estimates could have been even higher if it wasn’t for frost damage to cereals in Western Australia.

The sorghum market is shaping up as the one to watch though. ABARE pegged production at 1.46mt but some industry analyst have it as low as 1.2mt. Either way it tends to indicate the chance of having excess stock at the end of the year is remote at best. The domestic market is also more than happy to buy SOR2 at $40 under the SOR1 spread.

US soybean futures saw pressure from a rapidly progressing harvest in Brazil. Chicago wheat slipped a little on the back of a favourable weather map in the US and the realisation that there is still millions of tonnes of wheat in the world.
Bearish sentiment over powered a weak bullish market that had seen nothing but technical fund trade driving prices higher. Weakness was found from an increase in cases of bird flu in Asia and talk of Mexico looking south for US replacement grain. Trump effect !!.

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