Grain markets continue to be a mixed bag
By Craig Ednie
19th July, 2023
This growing season has seen continual rainfall across the regions stretching from northern NSW right down through Victoria and across South Australia to the point where most growers are asking “El Nino? What El Nino?”
As we sit here today the experts are in agreement that with warmer than average water congregating out in the middle of the Pacific, the ocean is in full El Nino mode. However, in order to feel the full effects of El Nino we need the atmosphere to follow suit and quite evidently, for the most part, that has not happened yet.
Southern NSW and Northeast Victoria are wetter this time of year than last with the majority of the zone having a full, or near-enough to full moisture profile. With crops well and truly established, the number one thing on most growers wish-list is some sunny days which given the back end of the calendar is forecast to be dry, feels like a case of ‘be careful what you wish for.’ However, provided a timely Spring rain or two, on top of the current subsoil moisture levels the chances are increasingly in favour of an above average crop. From here on, given we have an established profile of moisture, it’s not necessarily the measure of rain that is of utmost importance, but moreso the timeliness of the rain that will determine crop potential and size.
Grain markets have continued to be a mixed bag. Wheat markets slipped lower early in the month only to rebound. Canola is still volatile but holding within the recent trading range. It seems growers retain plenty of canola ownership and are engaging on the back of market rallies pushing through target track pricing levels of $700 or more. Global canola production estimates will likely be cut by 1-3 million tonnes resulting from dry weather across northern Europe and parts of Canada. Despite this, global canola production will remain near record levels. Barley prices have firmed, and demand has built to the point where barley is now being trucked in from Southern NSW and shipped from the other side of the country. Supplies are still plentiful from further afield. The new financial year didn’t see any real increase in grower selling as the market was anticipating.
The Black Sea Grain Corridor is coming up against the expiration date of the 18th of July, which is almost one year to the day from the deal’s initial inception. Under the agreement Ukraine has exported almost 33 million tonnes of agricultural products which includes 16.8 million tonnes of corn and 8.9 million tonnes of wheat, so clearly the outcome is important to global trade flows and anything other than an extension will have a strong bearing on markets.
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