Grain growers grinning as new 'norm' sets in

Rain improves outlook for Australia's croppers

Cropping
Hopes for good winter grain yields in many areas of the east coast have been buoyed by the ability to sow crops into full soil moisture profiles in 2020.

Hopes for good winter grain yields in many areas of the east coast have been buoyed by the ability to sow crops into full soil moisture profiles in 2020.

Aa

Grain sector buoyed by full soil moisture profiles and potential for wheat prices to kick.

Aa

Well what a week we have had.

Life is starting to get back to normal again, with kids back to school; pubs and restaurants opening-up; and footy just about to kick-off.

Most grain growers have a grin from ear-to-ear and are full of optimism. Life doesn't get much better than this.

As the bulk of the eastern seaboard's crop sowing has now finished, attention is turning to forward sales of new crop.

We have not seen a full moisture profile at the end of sowing since 2016. If the stars align, and we enjoy timely rainfall, an above average crop is well and truly on the cards.

Current new crop pricing is quite solid, with Australian Premium White (APW) M/G wheat in the Port Kembla-Newcastle zones this week repeatedly at $310-$315 per tonne track. This equals back to a site price of $265-$275/t - depending on site location and buyer competition.

I understand this is not the 'magic' $300/t level that a lot of growers are waiting for, but if it's the worst price you receive this year that's mouth-watering - and if it's the best, it is still a great result.

As for barley, there is hope since China's tariff bombshell and a $50/t fall in prices after the announcement.

New crop pricing has crawled back to a more 'normal' pre-drought level of $188-$195/t site pricing through the Central West this week.

Yes, it's not great, but that is about a $10-$15/t site price increase in a fortnight - and delivered bids now available into the Griffith region are $205-$215/t for January-February 2021 delivery.

Combine this with: potential Saudi demand - as we are currently priced into that market; a new trade agreement with India; and the expanding market for feed grain into Indonesia, and there are some faint positives in the barley market.

Don't forget, whoever takes the Australian share of the barley market in China will leave an opening for exportable sales into their markets.

Add to this the low AUD, and a protentional rebound is very much a possibility. So, all is not lost regardless of what some mainstream media is saying.

As for canola, reports have mentioned that a prolonged dry spell is taking place in Northern Europe and Russia.

This has resulted in an increase to pricing, which then kicked canola futures markets to a two-month high.

This allowed Newcastle and Port Kembla pricing to climb to $604/t track which, with a large eastern seaboard crop on the cards, shows excellent value.

But, with a long way to go until harvest, it is understandable why many growers are very hesitant to forward sell.

That may not be a bad thing, as more demand for canola seed could potentially increase prices.

This will come mainly from Europe due to low supply caused by the drier conditions, higher crude oil prices, and - once again - the lower AUD.

There are plenty of 'ifs, buts and maybe's' here, but the east coast is in a pretty handy position at present to capitalise on a promising season ahead.

Aa

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