WA Market Wrap
By Richard Beck
4th June, 2024
The majority of grain growers in Western Australia have completed their planting programs into generally very dry ground. Others have pulled up, with the bulk of their planned hectares sown and are waiting for a definite forecast of rain before completing their intended program. There are a few who have not turned a wheel. Needless to say, very little crop has germinated.
On a brighter note, weather forecasters suggest the patterns are finally becoming more winter-like, and models for June to August suggest rainfall will be at least average. If these projections are right and there is some rain in the spring without excessive heat cereals could still achieve average yields. However, canola emerging in the second half of June will have a much lower chance of achieving average yields. With this in mind, many growers have significantly reduced canola hectares or removed them altogether.
On the east coast of Australia, from Queensland through to Victoria, conditions are very good with full soil moisture profiles from summer rain and numerous rain events in April and May. Sowing is nearly complete in these areas. Southern NSW is a little drier on the surface but has good moisture at depth. The Victorian Mallee and most of South Australia are very dry and growers have sown about half their intended area, and most will complete their programs.
After reaching 12-month highs leading into our 23/24 harvest, prices for all grains drifted lower right through March. Black Sea wheat sales seemed to hit new lows every week and big carry overs of canola in Canada were the main focus of the market.
Since March, grain and oilseed prices have been pushed sharply higher. The traditional weather market drivers, which had little impact in the last few years have returned to be front and centre this year, with prices reacting strongly to any news affecting production. Dryness and frost in Russia and the Black Sea region, wet conditions in Europe, dry conditions in the US, Canada and Argentina and floods in Brazil have all had plenty of coverage and to varying degrees and have pushed prices higher. The responses to these drivers have been amplified by major market participants unwinding large short positions when supply became less certain.
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