IT’S with no sugar coating that I say the situation facing most crops across southern NSW looks very grim today.
The region has endured one of the driest winters in recent history, with a brutal run of frosts (26 sub-zero days in August alone) showing no mercy to the already stressed crops.
Reports coming from growers in the plains country to the west indicate plenty of canola and barley was severely affected by frost earlier this month, with crops already being fed to stock or sprayed out.
Wheat was at an earlier growth stage when the frost hit, so there is still time for the plants to recover and hopefully rebuild some of the lost yield.
Rain would obviously give this process a much needed boost, but unfortunately the current forecast does not provide much hope in the short term.
Added to this, the risk of further frosts still lingers over the region like the sword of Damocles.
Conditions to the east are better, some getting a bit more rainfall in the few events that did pass through during the growing season.
Others are relying on stored moisture left after the Spring flooding 12 months ago, which just shows what a difference a year makes.
But with more than a month passing since the last substantial rain, yield estimates are being wound back daily.
Cool day time temperatures have been just about the only meteorological element in our favour lately, as everybody crosses their fingers for a decent rain to arrive before any heat does.
With more than half the east coast cropping belt experiencing a similar situation, wheat prices have reacted accordingly with a decent weather premium now built into domestic bids.
New crop Austraian Premium White (APW1) multigrade bids have climbed back above $300 a tonne Port Kembla track, approaching levels last seen back in July when the market spiked due to North American production concerns.
While that earlier move was driven by a lift in Chicago Board Of Trade futures, the current rally has been pushed up almost entirely due to basis strengthening as east coast domestic conditions continue to falter.
Port Kembla basis today sits about $100/t, which is right near the top of the historical range it has traded over.
If rain doesn’t arrive soon, expect basis to remain strong until grower selling increases, which at the current rate is unlikely to be until harvest.