As we near the mid-point of the grain growing season, the current production outlook for NSW is in stark contrast between the northern and southern areas of the state.
Regions north and west of Gulargambone are experiencing infrequent and, at times, ineffective rainfall events, which has meant the crop is well below average in terms of growth and biomass to this point in the season.
Whereas the areas south of Narromine have really benefitted over the last month from back-to-back rain bearing systems, which have dramatically turned the season around.
The areas between Condobolin-Parkes in the south and Gilgandra in the north certainly aren't out of the woods for the season, but through to the end of July are definitely in the hunt for average yields if the weather in spring is kind.
And herein lies the risk for the 2023 season as the weather starts to warm and the day lengths increase.
Throughout the grain industry, we hear the constant chatter of an impending El Nino, and it's these headlines that permeate a sense of nervousness throughout all grain growers in the state.
The juxtaposition between the northern and southern areas of the state couldn't be more dramatic this season.- Angus Groves, AWB Cargill
Realistically for the regions with crop established and growing, we only require timely rainfall events in August and September to ensure we get an average crop.
The trouble with this world view is there are a lot of areas in the north of the state where there wasn't a crop planted at all, or the crop that was planted hasn't germinated.
So, the juxtaposition between the northern and southern areas of the state couldn't be more dramatic this season.
The local market has reacted to this, with exports largely grinding to a halt to ensure we have adequate feed grain requirements available should the northern season turn particularly dry.
The escalating challenges throughout the Black Sea continue to make headlines and create volatility in the markets.
Add these tensions on top of the ongoing fluctuations in weather forecasts for the US, Canada and Europe, and it's a clear sign the volatility is likely to continue.
The bearish factors that could change the prices for our local Australian market include an agreed extension to the Black Sea grain corridor, improved weather forecasts for US and Canada particularly, and the increase in selling from both the US and European farmers as they progress with their respective harvests.
As always with grain markets, it's a fine balance between supply and demand. With each changing independently, it makes it difficult to predict with any certainty which way the markets will move.
One thing is for certain historical price deciles provide a fantastic guide as to which commodity you should be selling at any point in time.
This should be balanced with your own production risk, for which you will be the best judge by simply looking out the kitchen window.