Positive picture emerges for crops as nation heads into spring and the coming harvest

Prices sizzling as crop harvest looms

Cropping
Spring has sprung for grain growers as global prices continue to fire and crop estimates increase.

Spring has sprung for grain growers as global prices continue to fire and crop estimates increase.

Aa

Global prices continue to sizzle and grain crop estimates are growing.

Aa

Ongoing favourable conditions in most of Australia's cropping regions are supporting yield upgrades at a time when global grain prices continue to sizzle.

There have been price falls in recent weeks for most grains and oilseeds. But values remain historically favourable - even compared to this time last year.

As of September 14, prices for Chicago Board of Trade (CBOT) wheat remained 25 per cent higher year-on-year.

US spring wheat was up 68 per cent year-on-year, CBOT corn was 36pc higher year-on-year, soybean was up 28pc year-on-year and MATIF Canola was up 49pc year-on-year.

So, while recent declines have not gone unnoticed, global prices are still at historically favourable levels and are expected to remain so.

For wheat, we see global price support during the next 12 months due to reduced ending stocks for a second consecutive year.

Driven by import demand remaining strong and global production challenged by adverse weather, the market will remain tight.

Global feed markets have declined in the past month as the Ukrainian corn harvest came online and we edged closer to the US corn harvest.

But supportive drivers for price remain.

Ending stocks for corn in key exporting markets are expected to remain low for a second year in a row in 2021-22, albeit edging slightly higher year-on-year.

Meanwhile, total Chinese feed grain imports are forecast to remain between 40 to 50 million tonnes in 2021-22 - and roughly double pre-2020 levels.

The global oilseed complex is expected to continue receiving support from the lowest US soybean ending stocks in seven years.

Canola prices have been a substantial beneficiary of tight oilseed supplies globally.

Nearby month prices in the European Union are hovering at just above $900 per tonne.

We expect canola to continue seeing price support for the remainder of 2021, and the opening of 2022.

Assuming improved seasonal conditions in the Northern Hemisphere remain for the 2022-23 crop and high prices at planting prompt a significant expansion of acres, a sharp correction downward in price is possible as the market digests prospects of a very large canola re-supply.

And all the while, global prices continue to sizzle.

Australian grain crop estimates are growing.

Across most of Australia, growing conditions have been favourable, with only a couple of exceptions.

South Australia's winter cropping season - with the exclusion of primarily the northern Eyre Peninsula - has mostly recovered from its less favourable start to now have good prospects.

In Western Australia, a recent widespread frost across large swathes of the wheatbelt has resulted in notable damage to crops. But production overall is still set to be above average.

NSW is also on-track for its second consecutive exceptional year, Victoria is doing well and Queensland, despite less-than-optimal conditions in central regions, is looking at its biggest wheat harvest in five years.

The grain is not yet in the bin, frost risk remains, some regions will need rain to meet their current potential, some may have a wet harvest and the re-emergence of mice populations is likely.

Aside from this, Australia's overall grain and oilseed production outlook is good.

The combination of still sizzling grain prices and great production prospects is an excellent way for Australian spring 2021 to open, especially when we expect the sizzle to continue.

Aa

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