SA Market Wrap
By Craig Povey
25th April 2024
The window for winter crop sowing has now opened with seeding of stockfeed and canola commencing in the earlier districts of SA. Victoria is not far off starting, while above-average summer rainfall across large parts of NSW and Qld has allowed for sufficient build-up of subsoil moisture reserves. NSW in particular is experiencing an exceptionally well-timed seasonal break. The WA cropping belt is drier-than-normal for this time of year. Persistent dry weather having been experienced since well back into 2023. With the exception of some early dry sowing the majority of growers in the west are waiting to commence sowing.
Growers are cautiously optimistic for another productive season. The ABARES March 2024 report forecasts a two per cent rise in the nominal value of crop production to $49 billion.
This increase is largely led by higher volumes of wheat and barley, totalling approximately $400 million, with favourable weather conditions supporting larger growing areas. This increased production is likely to offset lower prices currently being seen in Australia. Wheat prices are forecast to remain low for the remainder of 2024, barring any major issues, given the large levels of supply available globally.
Canola production is forecast to increase by approximately $300 million in 2024/25.
Like wheat and barley, this is driven by an expected increase in production rather than an increase in commodity prices, largely due to improved yields via genetically modified hybrid canola varieties. The overall planted area will be determined by the timing of rainfall at planting and expected gross margin returns. WA being the state with the largest swing factor for the area of Canola.
The planting area to canola is expected to rise by one per cent for a total of 3.5 million hectares this season, which would make it the second-largest area on record. It is expected that Australian Canola prices will remain steady over 2024/25, with increased global supply reducing demand in the short term. All eyes turned to the Bureau of Meteorology's first winter forecast late last week. The bureau modelling is showing the potential for the warmest winter on record across Australia, with the report suggesting minimum and maximum temperatures are likely to be one to two degrees above the long-term average.
Social media weathermen are strongly supporting the conclusion of El Nino at the end of April 2024. The bureau is playing down the chance of La Nina developing but not writing it off entirely. The forecast at this point is for a fifty-fifty chance of it being not wetter or drier than average, but should Pacific Ocean water temperatures decrease, this will strengthen the chance of a La Nina event.
In summary, growers across the country are quietly optimistic, with some describing this as the best-timed autumn break, they have ever seen, whilst others in SA and WA continue to eagerly await any sign of an opening break. While global demand is keeping commodity prices lower than in previous years, it is hoped that yield potential will make up for these lower prices.
All the best for a smooth and timely seeding period with plenty of in-crop rainfall to come.
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