Rain makes grain
By Brad Cullen
10th October, 2023
Its fair to say that a rain in spring is worth its weight in gold and last week we saw this come to fruition with reports of 15mm to 100mm+ recorded. In some regions, the rain came too late to add yield, however this one event will certainly lead to small grain size and pinched grain being a lot less common occurrence than it might have been, as crops were beginning to run out of moisture. Wheat, flowering canola and lentils will really see the benefit of this event particularly.
Whilst farmers with hay on the ground have probably seen a drop in the quality of their hay, the good the rain has done to their growing crops will go a fair way to offset any negative feelings they had re hay quality downgrades!
Markets certainly reacted to the rain as well with production now stabilized to some degree. It now appears obvious that on the east coast, Vic and Southern NSW, ports are going to have to export a decent chunk of crop which means prices have fluctuated accordingly.
Canola, at this stage doesn’t appear to be the white knight it was last harvest, with its price dropping to levels that say wheat and barley represent a better selling opportunity. There’s a saying in grain markets: “nothing kills high prices like high prices.” It appears canola is a prime example of this saying with growers globally having reacted to the high prices on offer and planting more oilseed – thus driving the market down.
Barley has gone from being the commodity no-one wanted to talk about, to being the star performer of late. China’s decision to remove tariffs on Australian barley meant that barley had an important export market to target. Prices rallied on the announcement and have since followed the broader commodity market downwards as harvest approaches.
Wheat was probably the biggest winner from the rain event last week. Its later sowing and longer season type characteristics meant it was really looking like it was beginning to struggle and may not have finished in some instances. This rain will mean the grains that are there will bulk up and tillers won’t be aborting. Barring a wet harvest, grain quality should now improve with little likelihood of feed wheat being produced on a broad scale. As a result of this, ASW will now trade as a feed grain – worthwhile watching where spreads end up here.
The harvest season is just around the corner, and it looks like there’s going to be plenty of grain to strip. Grain and oilseed prices will continue to get their direction set from export markets with a decent amount of shipping having to be completed to get the expected crop out of the country. A crop, of course, that would be a lot smaller if it wasn’t for last week’s rainfall event!
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