LOCAL grain markets were broadly lower last week following a selloff in US futures markets and another general rain across Western Australia and south eastern Australia.
ASX east coast wheat futures for a January delivery, which is reflective of the new crop Melbourne price, ended the week down $17 a tonne at $325/t.
Sharp declines were also recorded in the new crop bids in all regions, including the Queensland Darling Downs, southern NSW, as well as Western Australia and South Australia.
US wheat futures fell two to three per cent for the week as winter wheat harvest pressure kicked, increasing the need to boost the poor export sales pace.
Increasing confidence for Australia's 2019 winter crop also weighed on the new crop wheat and barley prices. Recent widespread rain across Western Australia, South Australia and south eastern Australia eased early concerns following a late start in some parts.
But the drought continues in southern Queensland and northern NSW with another season of poor crops now unavoidable.
Effects of the drought in large areas of Queensland and NSW now extending well beyond the farm gate and are being felt in the broader economy.
Australia is importing wheat for the first time since 2007, cattle numbers continue to fall as farmers sell livestock in a mix of drought and high feed costs while grain, meat and wool exports have plummeted.
Visible drought impacts may be waning as a green tinge extends up from southern NSW into the central west following recent light rains.
Optimism is surfacing with the improved rainfall, but soaking rains to replenish the dry subsoils.
Costs from the drought will continue long after the rains returns. Livestock prices are high which will make it expensive for farmers to restock. Water storages are critically low and flows across several inland NSW rivers have virtually stopped.
Australia's wheat exports for May were 1.2 million tonnes. It's the first time Australia's monthly wheat exports have exceeded one million tonnes for the first time in the 2018/19 marketing year.
National barley exports for May were about 300,000t, with most of this shipped from Western Australia.
Western Australia has exported about 2.85 million of barley from October to May. Traders estimate that a further one million tonnes of barley may have been shipped to Queensland and other eastern Australian states in the past nine months.
