Harvest has kicked off in earnest in NSW and is winding down in Queensland. Victoria and SA have made a start, and we are still waiting on the first harvest progress report out of WA, but northern areas are likely getting into it when the weather allows.
The Queensland harvest is usually short and sharp, as producers in Central Queensland and the Darling Downs wind up by the first week in November. As of last Friday, GrainCorp had received 1.273 million tonnes in Queensland, as clear weather allowed a quick harvest. Last week saw harvest slow after two weeks of deliveries around the half-a-million level.
Queensland is in front in the GrainCorp network, but after this week, NSW is likely to go straight past it. Clear weather later in the week should see harvest get a good head of steam up. Early November last year saw NSW receive 1.4mmt in a week, the largest week of harvest.
Victorian and South Australian harvests have only just kicked off, with a few northern sites open and receiving early barley.
Figure 2 shows harvest is slower than last year, when the week 3 total was just over 1mmt higher. Intermittent rain delays in northern NSW look to be to blame for the slower start, as it is NSW where the deficit on last year is largest. The coming month will see a vast majority of harvest come in if the weather plays the game.
On the price front, improving trade outlooks in the US appear to have negated any harvest pressure here for the time being. Cereal and canola prices gained some ground last week, despite harvest coming in. Figure 3 shows barley prices and ASW wheat futures all ticking up last week, although coming off a low base.
What does it mean?
Grain and canola prices will remain beholden to international values unless we see a major harvest disruption, which brings with it quality concerns and contract squeeze. It’s worth keeping this in mind, as it can create opportunities for sellers.
Key Points
- Harvest is well underway, with Queensland largely finished and NSW ramping up.
- Harvest is running slower than last year but can quickly catch up with fine weather.
- Prices are following international markets, with a major disruption required to see a decoupling.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: Graincorp, CBH, Viterra, ASX, CME, Bloomberg, Mecardo
