We begin 2018 with positive vibes, fuelled by New Year’s resolutions, but it has been a slow start with much of the trade more concerned with the demolition of the English cricket team who could not handle the “pressure cooker” of the SCG for the final test. (Temperatures reached 55 degrees in the middle of the ground on Sunday!).
Globally, Chicago futures had a correction at the conclusion of last week, though with weather concerns the main topic of conversation in the lead up to the USDA report on Friday, spot futures have firmed over the recent trading sessions. While the weather concerns in the U.S could potentially reduce their crop size by 1-2 million metric tonnes (mmt), this pales in significance to potential frost damage in the Black Sea growing regions which could see losses of 5mmt +.
Across all Australian port zones, harvest progress is largely at completion, though many tonnes remain warehoused. Cash selling was active to finish 2017 and has begun to increase again as growers turn their attention back to marketing in the New Year. Geelong Melbourne APW is trading actively around $260 track, with growers happy to let go of good volumes. Other markets of note are new crop sorghum, which have reacted to the increased heat and lack of rain. Trade estimates for production are varied, anywhere from 1.7mmt up to well over 2mmt, inviting further volatility. In the past week northern markets have rallied significantly with Brisbane Track Sor1 trading at $280 for Mar/Apr and Newcastle trading at similar values for Apr/May. The Darling Downs showed some initial reluctance to follow suit, but is now quoted in the high $270’s delivered Mar/Apr.
Elsewhere, Darling Downs feed markets remain relatively subdued with SFW offered at $325 without a bid and F1 offered at $325 and bid $315.
In pulses, Desi Chickpeas continue to see a softer tone. India’s 30% import duty for chickpeas sends a clear message that they plan to import fewer pulses this year. India uses one HS code for chickpeas, so this duty would apply to all types of chickpeas.
Unless there is a weather disaster in February or March, India is looking at another record chickpea harvest. Based on the average Kharif summer harvest, India's available supply of pulses in 2018 could total 23.74mmt. This will make 2018 the third year in a row where the per capita available of pulses is above the minimum annual dietary requirement of 17.5 kilograms (kgs) per capita. Nutritionists believe per capita availability needs to reach 20kgs per year to ensure a healthy population. Meeting that requires almost 26mmt of pulses. Pulse supplies exceeded the optimal supply by 2.12mmt 2017, suggesting India has a residual supply of pulses almost equal to that amount.
The implication is that India only needs to import 2.7mmt of all pulses during the next 12 months to provide every citizen with enough pulses to ensure a healthy diet. However, the reality is that there is a large proportion of the population who do not consume the minimum 17.5kgs per capita, suggesting that imports will even be lower. This will be significantly lower than last season where India imported a total of 4.95mmt of all pulses (2.7mmt from Canada, 0.25mmt from USA, 1.9mmt from Australia).
On other pulses, Albus Lupins markets are stable with consistant demand coming from offshore. Current crop deliver packer at $420 /mt Feb/Mar. New crop (Nov/Dec 2018) deliver packer at $385.
Please note, all prices are correct at time of writing and are subject to change.
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