Grain Wrap | Later crops worth the wait

Later crops worth the wait


Cropping
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Crops are quite late in general and growth seems well behind what is typical for this time of year.

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THE weather continues to tease across most areas of southern NSW, with sporadic small showers of five millimetres or so doing enough to keep crops alive but no signs yet of the decent drenching needed to provide for the confidence that the crops will get through to harvest. 

Warmer and windier days always turn up at some point during spring, we can only hope more moisture will arrive first. 

Crops are quite late in general and growth seems well behind what is typical for this time of year, so the one positive is plants haven’t set up a lot of leaf bulk and can maybe direct whatever limited resources are available into grain production. 

Yields are certainly not expected to shoot the lights out, but with current grain prices there is still the opportunity for a decent return from any paddock worth putting a header on. 

New season Australian Premium White 1 wheat multigrade bids are currently over $460 a tonne Port Kembla track, with F1 barley topping $400/t and canola close to $530/t. 

All commodity prices are sitting right at the top range that they have traded for over the last decade, and most actually setting new highs which reflect the drought conditions throughout much of Australia’s eastern coast grain production zone. 

Global markets are still trying to sort out what will happen with order flow throughout the next 12 months. 

Wheat continues to leave the Russian region at a fast clip, but there is one foot hovering close over the brake pedal. 

The expectation is this grain flow stops once Russia decides exactly how much they need to cover their own domestic requirements. 

When this cut off occurs is unknown today, so the market will remain jumpy until that line in the sand is drawn. Estimates of total Russian exports have reduced from 35 million tonnes down to 30 million tonnes in recent months. 

A swing of five million tonnes lower in Russian exports is significant in this season where the major grain exporting nations have all experienced a marked reduction in crop production. 

Once this situation is resolved, attention will turn to the US as the next likely cab off the rank to supply wheat to the world. 

Wheat from the US will be more expensive for buyers, leading to a general step up in values that will flow through to grain prices from other origins like Australia.

As always there are no guarantees, but that is how things are set up today and now we wait to see how it plays out.

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