Grain Wrap | Eastern grain sales subdued

Eastern grain sales subdued


Analysis
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Last season certainly proved the worth of good weed control and stubble management.

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JANUARY in Australia and the mercury is rising. 

The lucky ones are holidaying seaside while the rest can only try to get outside jobs knocked over before lunch, then retreat indoors to avoid afternoon temperatures that feel like they could quickly turn a person crispy. 

Southern NSW has recorded the occasional thunderstorm in the past month, adding some moisture to the profile. 

This also adds dollars to the chemical bill as farmers try to stay on top of weeds to keep as much of that moisture as possible locked in the soil and available for growing crops later in the year. 

Last season certainly proved the worth of good weed control and stubble management. 

Growers that did the best job of retaining moisture had it pay off with significantly better yields when compared to paddocks that were more reliant on the limited in crop rainfall that fell.

Grain selling activity has been very subdued this month, after most growers proved more than happy to take advantage of the strong harvest values and sold a significant portion, if not all of their production soon after it came off. 

Any parcels unsold at this stage are either being tightly held to cover/rebuild own feed requirements, or waiting patiently in hopes of a lift in prices. 

At the moment, east coast grain prices remain relatively stable, with various delivered markets capped at whatever level it costs to bring in grain from other parts of the country. 

Grain from Western Australia, South Australia and Victoria has been moving by road, rail and sea across NSW and Queensland. 

Expectations are this flow of grain will continue right through until next harvest, so if something happens to lift or drop prices in those origins it will also impact east coast values. 

Western Australia produced close to 16 million tonnes across all commodities this season, so even after domestic demand is covered a significant portion will still be exported. 

This should mean Western Australia will be particularly responsive to international market movements, at the moment we continue to wait for those movements to appear.

Total global wheat production is down after a run of record production years and expectations are the cheapest supplier (Russia) will clamp down on their exports at some point. 

If/when this happens, prices should lift to start drawing out stockpiled grain from US storages. 

The market has been predicting this shift for a number of months, it just hasn’t happened yet! 

The current government shutdown in the US has stopped the release of the regular agricultural reporting relied on so heavily by the grain and cropping industry, which only adds more uncertainty to the situation. 

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