"Marge, the rains are 'ere - again?!"
By Tyson Hosie
Australian grain and oilseed producers continue to have one eye on the weather map, the other on the bidsheets, as prices that were considered “aspirational” only a few short weeks ago are being achieved just as the bureau adds some welcome colour to the forecast for much of the East Coast.
There is confidence building that at an above-average crop could be achieved with the soil moisture currently on offer, however the difference between a good crop and a great crop will rest on how the last vestiges of winter plays out.
Across most of New South Wales, the past few weeks of clear and sunny winter days have been welcomed. However, crops across the area did get a little accustomed to a certain lifestyle, with Hughie seemingly delivering 10-15mm of the good stuff almost every Thursday afternoon there for a while. Should this weeks’ forecast bear fruit, another fall in mid-to-late September would see it all over bar the shouting.
A fall in September would be timely too for the 2021/22 Summer cropping program, with sorghum and cotton growers looking to capitalise on the fantastic starting conditions, complemented by strong pricing.
Broadly, the market remains underpinned by the very well publicised production concerns emanating from the Northern Hemisphere. The latest figures from the USDA World Agricultural Supply and Demand Estimates (WASDE) suggests that global wheat supplies will decline by some 16.8MMT due to poor growing conditions through Russia, Canada, and the US, with the Canadian crop expected to be its’ smallest in a decade. The Ukraine and Australia are now being charged with the task of partially offsetting this global reduction in production, which is fuelling local prices for wheat to levels not usually seen outside of our drought markets.
Oilseed markets continue to be driven by the production issues in Canadian canola, Russian sunflowers and US soybeans, all of which are seeing Australian canola prices go from strength to strength. Be mindful however, that the market expects a large European and Black Sea sunflower crop, which will help alleviate some of the pressure on global oilseed markets later in the year.
Domestically, a significant amount of grower selling was noted over the past week into different marketing options, including both upcountry and direct to port options. With harvest only a few weeks away and production confidence building, we’re all now having to formulate a game plan that needs to consider the plethora of market and industry influences, not limited to: on-farm storage constraints, the potentiality of protein Wheat market volatility, an increase in domestic consumptive demand as the feedlot sector begins to rebuild numbers as well as lingering logistics issues – both domestically with trucks and potential border controls, and internationally with container availability and high ocean freight rate concerns and not to forget our perennial rural labour shortage!
The upcoming harvest is shaping up to be one of our best, with weather over the next week or two posing as the key to a great result – here’s hoping it’s not just a couple of kids getting stuck into some corn on the roof…
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