Harvest Winding Up
By James Massina
Harvest is winding up as we head into Christmas with local markets firming over the past three weeks. This strength isn’t being driven by any offshore demand for Australian wheat but more simply a case of growers being unwilling sellers at this time or price. Shorts in the market have had to find cover by bidding up to attract interest from growers with various markets up $10-15 over the month. Yields are being reported broadly in line with expectations, but a few disappointing exceptions are noted, Western Australia in particular. Industry crop forecasts have slid slightly lower as a result of the smaller than forecast Western Australian crop. Also worth noting is the continued dryness in Queensland and New South Wales that has almost run out of time now to plant sorghum. This is pushing consumers to add more wheat and barley into the ration there and thus keeping markets well bid.
Futures markets found a way to break out and trade new highs. Mostly being driven by optimism around the potential for a US/China trade deal and subsequent agreements to purchase US farm goods, but also a tinge of support from difficult crop conditions in a few areas. South American summer crops haven’t had the perfect start and there are emerging areas of dryness in some winter wheat areas but it’s far too early to be particularly alarmist about this. All up it’s been a pretty wild ride on futures with CBOT trading a 35c range to start the month. Currently sitting in the mid 540’s in WH, we’re about 10c over where we closed in November. Cash markets too are a little firmer with Black Sea wheat values finding an extra couple of dollars. Worth noting here that that firmness is probably in response to better demand for that region as Australia has rallied away from being competitive into places like the Philippines. Long term, that is demand that we need to keep, even with our small crop, so losing that here in the depths of harvest doesn’t bode well for exports later in our campaign. But our market ignores that for now – not relevant when the grower isn’t selling today.
The AUD continued it’s trend of previous months sitting in a well-defined range and is currently trading in the mid 68’s. That’s about half a cent firmer than last update and about half a cent lower than its high earlier in the month. To say there is not much to talk about in FX markets is an understatement. It seems everyone has already left for their Christmas break.
Northern drought sends big machinery south to support harvest
Extra equipment has been trucked into GrainFlow sites in Victoria and South Australia for this year’s harvest.Read More
Time running out for sorghum
The traditional planting dates for Southern Queensland and Northern New South Wales are passing by and today it feels like we’re on track for the smallest sorghum crop in many years driving prices to levels we have not seen for some time.Read More
Rains and cooler weather slowing down harvest progress
Last week’s rain events throughout New South Wales saw up to four inches fall in parts, proving to be more of a hinderance than help given the volume of exposed hay sitting in paddocks and maturity of the crop.Read More
Small relief, but can it restore belief?
Much needed rain fell over most of NSW at the end of last week, and then continued right through the weekend as the system moved slowly through inland areas.Read More