Harvest deliveries rising, wheat prices easing

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The grain harvest is underway and will move south at pace over the next ten to twelve weeks. Here we look at how the harvest has historically progressed, and how it will start to impact prices if it hasn’t already.

Graincorp released their first ‘Harvest Update’ media release last week, and another on Monday, and it tells us harvest is well and truly rolling in Queensland and New South Wales.  Figure 1 shows cumulative grain delivered to Graincorp sites over the past two weeks. 

Queensland has already more than doubled the amount of grain received last year, while NSW has started at a faster pace.  You can’t see it on the chart, as it’s so small, but Victoria receivals have started in the Mallee, with 3,750 tonnes delivered.   

Figure 2 shows the better crop in Queensland, and the faster pace in NSW has Graincorps receivals to date running well ahead of the same week last year.  There is some rain forecast for the coming week, which might slow harvest down.  It doesn’t really look like enough to impact grain quality however.

Graincorp is reporting grain quality has been pretty good to date, with recent rain events having little impact.

The western part of South Australia has also kicked off harvest.  Viterra reported receivals started in the week ending the 20th of October.  No doubt receivals will ramp up sharply from here.  There are no harvest reports from WA as yet.

Harvest pressure doesn’t seem to have had an impact on prices over the last week.  With CME Soft Red Wheat, a little easier, local wheat prices have eased around $10/t over the last week (Figure 3).  Unless there is some major harvest disruption, it’s hard to see prices rallying independently of international values over the coming months.   

What does it mean?

With harvest now underway the trade will be grappling with quality differentials, based on how much is coming in. The coming weeks will tell the story, with November and December to see the bulk of Australian grain delivered.

Keep an eye on basis to guide selling decisions, it’s still ok for the big three commodities, and make palatable selling for those looking to lock in prices on harvest sales.

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Key Points

  • Winter crop harvest is underway and at this early stage the pace is faster than last year.
  • Harvest pressure hasn’t hit yet, with wheat slightly easing this week on the back of falling SRW.
  • It’s hard to see much upside independent of international markets in the short term.

Click on figure to expand

Click on figure to expand

Click on figure to expand

Data sources: Graincorp, Viterra, Bloomberg, Mecardo

Have any questions or comments?

We love to hear from you!
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