WA Market Wrap
By Sophie Wooldridge
18th May 2022
Almost a month after the agreement was signed between Russia and Ukraine to export grain out of Ukrainian ports, markets have continued a downwards trajectory. Approximately 40,000 tonnes of wheat and 450,000 tonnes of corn have been exported from Ukraine for July/August, and for now, the market is comfortable that the export pace will continue to grow.
China’s initial economic recovery from COVID-19 is starting to slow, with continuing lockdowns and slowing retail growth seeing the Chinese central bank cutting lending rates in an attempt to stimulate demand. If this continues it will likely dampen China’s demand for agricultural commodities, pressuring oilseeds lead by soybeans.
Despite some cooler weather and rain in recent days, there are still concerns regarding the EU and US crops, with drought affecting crop conditions. The latest USDA report announced US corn crop condition as 57% good or excellent, in line with 2019 as the worst condition at this stage since 2012.
Looking locally, the WA crop continues to grow in size. Whilst July was relatively dry, heavy August rainfall has boosted yield prospects and grower confidence. Generally speaking, crops are looking good across the state, and areas to the south which had restricted yields due to waterlogging last year are looking promising. This has seen grower selling ramp up in the past week and buyer bids pull back. Spreads to ASW1 and AGP1 have also widened, as the trade’s protein expectations for the crop are adjusted by the recent rains.
Similar to the East Coast, supply chain issues are causing headaches for WA growers and the trade alike. Issues sourcing trucks, train drivers and the logistics of moving last season’s big crop have seen CBH remove ‘out of zone’ nominations for growers for the coming harvest. Growers are beginning to enquire on 23/24 grains pricing to cover high input costs, yet bids are sparse to date.
We will be at the Dowerin Field Days on the 24th and 25th of August and Newdegate Field Days on the 7th and 8th of September, we hope to see you there if you are heading along.
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