SA Market Wrap - August

By Collette Wheadon

Well August couldn’t come quick enough with many regions recording the driest July on record. As we watched with optimism, the start of August came with a forecast of 20-30mm over much of the national cropping area, and markets began falling as they tried to digest what a rain of this magnitude could do for the 20/21 harvest.

The rain that eventuated was in some ways disappointing, failing to deliver the high levels originally predicted. However, for parts of Northern SA/VIC Mallee, Lower Mid North and Upper EP, these falls were a saving grace with crops starting to not only show signs of moisture stress but already losing some yield potential with lower tillers being lost. The 10 – 20 mm will only buy some time with follow up rains needed later this month to keep things moving ahead.

Elsewhere around the country things are lining up nationally for a big harvest. WA has made an impressive comeback with recent rains, and crops have been boosted towards near potentially average yields. The majority of VIC continues to look very promising, and the latest rains have maintained their average to above average forecast. The Western Districts and Lower South East of SA have enjoyed the below average July and crops have established without any holes from water logging, but all will be looking for a solid finish to keep the potential going.

In Southern and Central NSW this rain goes a long way to consolidating an already large crop. Crops are surging ahead and with the latest falls having profiles near full, this is setting them up for what could be a near record crop barring any disasters. With crops progress ahead of schedule now the main potential risks from here are frost and it becoming too wet.

Globally, futures markets saw some volatility over recent months on the back of production concerns in Russia and Australia, with prospects improving in both regions plus large crops expected in the United States and Canada we have now all but removed any of the initial gains made.

Locally markets also reacted to the improved conditions with new crop Adelaide wheat and barley bids falling $15-20 to sit around $270 port and $210 respectively. Canola seems to have somewhat bucked the trend trading at a range of $580 - $595. A reduced European crop, combined with recent gains in soybeans from renewed buying interest by China, have both been supportive of current canola values.