Global market rallies spur local grain selling activities

Australian grain in the box seat

Cropping
Rallies in global wheat, barley and canola markets have buoyed the spirits of Australian grain growers, who are rolling along with 2021 seeding.

Rallies in global wheat, barley and canola markets have buoyed the spirits of Australian grain growers, who are rolling along with 2021 seeding.

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Recent rallies in wheat, barley and canola values have boosted local confidence.

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As winter crop planting gathers momentum around Australia, greater attention is now being paid to wheat, barley and canola marketing options for the coming 2021-22 season.

Growers are mostly wanting to get the new crop established before genuinely engaging in the market.

But it is interesting to understand what is driving Australia's current values, and whether the influencing factors will persist for the remainder of the season.

Recent rallies across the three commodities of wheat, barley and canola can predominantly be attributed to ongoing production concerns in US and South America for corn and soybeans, with Chicago corn futures rising to their highest levels since March 2013.

Canadian canola and wheat prospects are being impacted by drought conditions.

And dry and cold conditions throughout European wheat, barley and rapeseed growing regions are trimming grain yield estimates, further fuelling speculation about international supply this coming year.

With these concerns in mind, Australia is again expected to be in the box seat for wheat and barley export demand, especially into into Asia and the Middle East - as corn is now approaching levels where it prices itself out of rations in favour of comparatively better value wheat and barley.

This will help to underpin Australian values for the balance of 2021, and will help us clear the decks ahead of the new crop harvest.

The strong international corn values will also continue to support Australian sorghum bids.

Strong international corn values are underpinning domestic sorghum bids.

Strong international corn values are underpinning domestic sorghum bids.

This is welcome news for those who are still to harvest and market later crops, and who may have been concerned that they had - figuratively and literally - missed the boat when it came to marketing their crop.

Be reminded, though, that sorghum remains comparatively expensive to wheat and barley domestically.

And, when combined with currently finite domestic appetite, the sorghum market will need to further explore export destinations to move the balance of the crop.

This is expected to be a steady process in light of recent execution challenges through the Brisbane Market Zone tempering the trades' enthusiasm to dive-in headfirst.

Avenues for off-grade sorghum continue to be explored, but will likely be more domestic in nature.

With the front-ended sorghum export program all but completed in southern Queensland, the focus for growers and the market now turns to Newcastle and central Queensland crops.

Growers across the Liverpool Plains are almost finished their harvest, and the earlier central Queensland crops will start to come off later this month.

A relatively fine forecast for much of Queensland for the coming fortnight will help both harvest and planting progress, while rain through parts of central and southern New South Wales will be welcomed after a drier April.

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