Grain Wrap | Wheat markets steady as harvest rolls on

Wheat markets steady as harvest rolls on


Analysis
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Yields are doing the majority of the leg work in the gross margin equation with reports of 4t/ha and 5t/ha fairly common.

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HARVEST is getting a run on in the Central West with ideal conditions to get the crop off during the past few days.

The canola harvest is coming to an end and yields further south are facing a similar result to the rest of the crop, where yields have been more affected by waterlogging and disease than initially thought. 

Canola prices have remained supported over the past week despite grower selling with the drop in the Austraian dollar, support in European futures and shorts in the market - and have all gone in the grower’s favour who are seeing prices over $500 a tonne local depot, which is historically a solid number.

Wheat quality appears to be as expected for the most part with Australian Standard White (ASW) the main grade being delivered, however there is more Hard (H2) and Australian Prime Hard (APH2) coming off than expected. 

Yields are doing the majority of the leg work in the gross margin equation with reports of 4t/ha and 5t/ha fairly common. 

Prices are remaining steady to slightly stronger as the lower Australian dollar has reduced domestic basis to levels where we are now starting to price into more export business with black sea values rising slowly over the last month. 

Argentinean wheat is currently the cheapest wheat pricing into Asian markets. 

Similarly to wheat, feed barley is also starting to find some export business as the lower Australian dollar has bought Australian feed grains back into the export picture. 

The futures market will be focusing on southern hemisphere crop size and harvest, mainly South America and Australia as northern hemisphere crops are heading into dormancy. 

There has been talk of dryness in the Hard Red Winter area in the US and winterkill stories in Russia, however we are not likely to see any rumours gain much traction until the crop comes out of dormancy. 

Asian demand will be also be the catalyst for the export market with stronger demand necessary to chew through the global grain glut.

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