Grain harvest is setting a good pace this year, with little in the way of weather delays, and crops coming off well. Prices have been holding well in the face of the strong deliveries, but lower international values may test the market this week.
Figure 1 shows harvest receivals for some of the major bulk handlers
across Australia. The numbers are total
receivals, so include all grains warehoused at Graincorp on the East Coast,
Viterra in SA and CBH in WA.
Queensland has all but finished its harvest, but compared to last year
receivals have been very strong. In
2023-24 Graincorp received just 412,900 tonnes in Queensland. By the end of last week Queensland’s
receivals for this season were 1.658 million tonnes. This represents a 300% increase in Queensland
grain receivals, with Graincorp reporting more than 1 million tonnes in the
Goondiwindi region alone.
The last two weeks have seen NSW and WA receivals ramp up strongly, with
good weather allowing harvest to move rapidly.
Figure 2 shows just how strong the harvest has been in northern cropping
zones compared to last year. Graincorp
receivals to the end of last week were three times larger than last year. A large crop in northern zones, along with a
relatively dry finish are no doubt resulting in harvest receivals coming thick
and fast.
As harvest moves south into areas that have done it tougher this year, we
will likely see the curve taper off.
Crop forecasts suggest the total will be smaller than 2022-23, but it’s
interesting to see that receivals to date are already at 64% of the 22-23
total.
Prices are holding relatively firm in the face of harvest pressure this
year. ASX Wheat Futures, which should
follow the lowest priced east coast port value have been ticking along at a
small premium to Chicago SRW (Figure 1).
The lowest-priced port is usually where the best supply is, which this
year will be Port Kembla or Newcastle.
In southern zones, wheat prices are stronger, with lighter supply
expected when harvest gets there. WA wheat values hold their usual premium to
the east coast while SA is largely in line with Victoria.
Canola prices have been moving in line with volatile international
markets. As outlined last week there is
plenty of uncertainty in oilseed markets in general, and canola in particular, which
has seen international futures bouncing around.
What does it mean?
Either growers are not selling at the silo or buyers are happy to accumulate at current levels, but we have hardly seen any ‘harvest pressure’ on prices yet. If we haven’t seen it yet, then we may not see it at all, with harvest well underway. The good news is that selling wheat off the header and forgetting about it is a feasible option this year.
Key Points
- Harvest has ramped up in the last two weeks, especially in NSW and WA.
- Queensland receivals were three times larger than last year.
- The appears to be little harvest pressure, making selling off the header an easy decision.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: Graincorp, CME, ASX, Bloomberg, CBH, Mecardo
