THE wheat market has taken a backward step early this week with news that the possible winter kill throughout the US Southern Plains and Black Sea countries was not as bad as initially thought.
This has eroded any weather premiums that may have been priced into US values, with March contracts currently trading at US414.00 cents a bushel at the time of writing, down from the high this month of US437.50c/bu.
In Australian markets wheat spreads continue to widen and this has seen higher protein wheat grades making up to $50 a tonne more than those who have been dealt the misfortune of growing grades Australian Standard White (ASW1) and below.
We also have improved export interest from South East Asian markets, with recent purchases from the Philippines and South Korea.
Equally, India remains a bright light for Australia with exports into the subcontinent currently exceeding our traditional export frontrunner, Indonesia.
NSW growers will be buoyed by the fact that almost half of the wheat bound for India was shipped from NSW ports since the new season began in October last year.
The Bureau of Meteorology, has released its three-month outlook this week and is forecasting rainfall for the months of February to April to be below average throughout eastern Australia.
There are a few factors at play here, but the bureau is forecasting warmer conditions over the next three months for areas south of Winton, Qld.
Two Bureau of Meteorology models are indicating a possible El Nino by June, which could provide a much need rally in prices around planting time if this eventuates.
With harvest all but complete and the end of month drawing near, it’s now time for the kids to return to school and for farmers around the country to start focusing on marketing their grain and planning for the year ahead.
It can be disheartening to turn your attention back to grain markets, only to find that prices have succumbed to both harvest selling pressure and the sheer volume of this year’s crop.
If you are discouraged by cash prices and cash flow is not an issue, take some time to look into various marketing alternatives that are on offer.
Things to consider include reducing cost of storage, limiting downside risk and potential to capture any upside that may occur during the volatile northern hemisphere weather months in the near term.
