Grain growers welcome improved conditions
By Nicholas Robertson
29th June, 2022
Never in recent history has it felt like the ag commodities market has exhibited such volatility in such a short space of time. A macro meltdown was felt over the past two weeks globally and the agricultural community were not immune to the destruction. Across the world inflation rates are gathering pace and as a result, countries are sharply lifting cash rates to curtail the problems associated with the rising cost of living. With many market participants nervous about what’s to come, looking forward it does not feel like the end of the story for these inflation issues.
As mentioned, grain and oilseed futures markets have fallen significantly on these macro problems however there are other fundamental issues playing out that are having an impact on prices on offer to farmers. In the oilseeds space, European and Canadian farmers were watching a bullish palm story unwind and sold heavily into the falling market. Palm oil exports had been banned in Indonesia and on the back of this stocks had been building. With Indonesia somewhat reversing the ban on palm this was a trigger for a market selloff. In addition, Canadas’s rapeseed sowing program has finished and conditions have been improving through key growing areas. Since this news hit the market, Winnipeg futures have fallen CAD$200 since the start of June with MATIF February contract falling EU100. Aussie values have followed international markets giving up $200 since the start of June.
While not to the same extent as canola, wheat values have also softened through June falling about $70 per tonne over the month of June.
Crop conditions in Australia have mostly improved in the last few weeks with wetter conditions in the west of the country and drier conditions in the east of it. Plenty of growers through NSW have welcomed a drier tone to forecasts recently however it remains to be seen whether the last of the planned winter crop program is sown through the wetter parts of the Riverina, Central West and Northern regions of NSW. With most of the wet conditions being experienced in the eastern parts of these zones, the western areas are thriving on healthy moisture profiles. Such a divide between the east and west of NSW is unusual and as such analysts will have a tough time in forecasting crop sizes as the year progresses.
Farmers have taken on higher input costs to plant this year’s winter crop and as a result are relying heavily on achieving both good yields and attractive prices to return a profit. So far with good rainfall and a promising forecast, yield feels achievable but with prices falling and the market taking a somewhat bearish turn, waiting for harvest cash pricing may be risky. Locally we are looking at a third bigger-than-average crop in a row and there feels plenty of selling still to come from growers in Australia.
Consistent wet spell adds to 'normal' year
In what we used to call a ‘normal’ year, the end of June has quite commonly been associated with the conclusion of the winter sowing program.Read More
Weather woes as market slows
The Australian Bureau of Agricultural Resource Economics and Sciences (ABARES) recently released its June report, tipping Australia to produce its fourth largest winter crop on record at 50.9 million tonnes.Read More
Cash markets shiver along with the growers
As much of the country shivers through a cold blast, one could be mistaken for thinking the weather had somehow managed to take the heat out of cash markets as well.Read More
A quieter week at the Chiropractors Clinic
Of late, it would seem, a market-moving event was a daily occurence, with both domestic and international commodity values reacting accordingly.Read More
Grains market lifts in face of season’s challenges
International wheat futures have consolidated this week after rallying last week on the back of India’s decision to abruptly ban exports.
Indian export ban causes import headaches
The global market caught a shock late last week when India announced an abrupt ban on its wheat exports on May 14.Read More
A logistical nightmare
The recent harvest provided a physical and emotional rollercoaster with the highlights of big yields and strong pricing counterbalanced by persistent harvest rains and the subsequent delays and quality issues.Read More
Oilseed demand lifts acreage
Significant increases to crop input prices hasn't slowed the efforts to plant this year's winter crop as almost the entire east coast has been gifted a well-timed and wide-spread autumn break.Read More
Optimal conditions align for winter crop
As sowing programs across the country ramp up on what for the most part is a full moisture profile, Australian farmers look primed to capitalize on record prices for their product.Read More
Where to from here
In recent months 'volatile' seems to have been the word of choice to try and describe grain market movements and, given we unfortunately don't appear any closer to a resolution to the crisis in Ukraine, it appears this description is likely to remain popular for some time yet.Read More
Existing world grains issues persist
Another week rolls by and another round of inputs into the discussion, more forcibly argued depending on the side of the fence you sit, seller or buyer.Read More
Watching for the flashes
Without a meaningful resolution in sight for the crisis in Ukraine, the market continues to trade under the expectation that disruptions to Black Sea grains and oilseeds will be felt for a while yet, increasing the requirement for alternative origins to step up and fill the shortfall.Read More
Sowing intentions start to emerge
International markets continue to trade erratically on the back of expected supply chain disruptions due to the situation in Ukraine. Whilst we all hope for a swift end to the conflict, it is impossible to predict how things will progress and as such international markets continue to trade volatile ranges on a daily basis.Read More