Taking a world trip with grain in our sights

Taking a world trip with grain in our sights


Grains
Aa

To provide an update on the grains market these days you almost need to be a foreign correspondent.

Aa

To provide an update on the grains market these days you almost need to be a foreign correspondent.

There are so many influences from around the globe combining to form a picture of the current market and its future direction. So strap yourself in for a trip around global grain markets.

Firstly, to the US with the US Department of Agriculture acreage report for June.

The biggest news to come out of this report was the 2019 corn plant coming in at 91.7 million acres with trade estimates at 86.662 million acres and down just 1.1 million from the March estimate.

The market was anticipating far worse following the deluge in the Midwest which slowed planting and many thought would severely limit the acreage under production.

Some pundits thought the gap between market expectations and the USDA report was one of the biggest market misses in recent memory.

The news hit corn values and wasn't helped by an improvement in weather conditions that may see acres increase.

The market rebounded somewhat when it was revealed that more than 15 million acres of corn counted in the survey, actually wasn't planted and that 14 states will be resurveyed in time for the August report.

The USDA report on wheat was a bit more predictable and wheat merely followed the antics of the corn market.

The USDA report all acres planted at 45.6 million acres, roughly in line with the trade estimate. Across the Atlantic, the European Commission reduced wheat forecast to 142.3 million tonnes, slightly down from the previous month.

While the dryness in the Black Sea region has been well discussed, there has been some new revelations coming out of India. It is being reported that India has recorded its driest June in five years.

About 55 per cent of India's arable land relies on rain and some report that if sufficient rain does fall in the next few weeks, India could face a crisis. Monsoon rains were a third lower than average but were even lower in some states.

Farm Ministry data shows farmers had planted 14.7 million hectares, down about 10pc from the previous year.

The G20 Summit has been grabbing the headlines. While our own Prime Minister Scott Morrison has been advocating for our trade interests with US President Donald Trump, it is Trump's meeting with China's President Xi that captured everybody's attention as the world waits to see which direction the US-China trade war will take.

The leaders have indicated they will not escalate the trade, but they are not backing down either. Meanwhile, there is no news on our own issues with China on the anti-dumping claims for Australian barley.

Saudia Arabia last week traded mostly Black Sea grain for August, September and October shipment. Australia was on average about $US35 to $US40 a tonne out of the market.

From a domestic perspective, consumers are not looking too far out for new crop with uncertainty surrounding the weather in the north weighing on feedlots and cattle markets.

Hope you enjoyed the trip.

Aa

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