Legacy of drought set to endure in 2020

Legacy of drought set to endure in 2020

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Grain prices remain well supported as northern feedlots and other grain consumers chase grain supplies.

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WE ARE at the beginning of a new year and a new decade but the after-effects of last year will continue to be felt.

2020 will be a year of hardship and a long, hard slog for NSW grain farmers and the industries that rely on the grain for feeding or manufacturing.

NSW will be largely dependent on interstate supplies to keep animals fed and the mills running in 2020 after last year's poor winter crop and what's forecast to be the smallest sorghum crop on record.

The flow of imported wheat is also expected to exceed last year's totals with Manildra Group, the country's largest flour millers, becoming even more reliant on Canadian wheat.

Grain prices remain well supported as northern feedlots and other grain consumers chase grain supplies. Southern Queensland stockfeed wheat bids continue to hover around $440 to $445 a tonne delivered into the Darling Downs but traders are saying they have had to pay more to secure supplies.

Sorghum prices rallied to $460/t delivered into the Downs on short covering pre-Christmas but prices have softened slightly since.

Southern NSW grain prices continued to strengthen in late December despite the bumper yields across much of Victoria.

Buyers have found it difficult to secure supplies from farmers to cover domestic sales commitments, particularly for barley.

GrainCorp has received 2.6 million tonnes of grain deliveries at the start of the week with strong deliveries in both the Wimmera and western districts. Harvest is winding down, but grain deliveries are still trickling in to some sites in western Victoria.

Only rain will start to ease the pain of the past three years of drought, but the financial burden will be long-lasting.

Even with rain, grain prices are expected to remain well supported because of the absence of local supplies and the need to ship and haul grain from WA by ship and Victoria by road.

Chances of appear to be improving with the weakening of the positive Indian Ocean Dipole which is allowing more moist air in the tropical north.

Indonesia is counting the costs after flash floods swept through Jakarta last week after enduring its worst drought in five years in late 2019.

Tropical Cyclone Black has formed off the north-west coast of Australia which is expected to make landfall later this week.

The cyclone is expected to bring welcome rainfall for some of the northern pastoral regions and may offer some rain for parts of southern WA.

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