WHEAT –
ABARES has wheat production pegged at 26.7mmt, 13% above the 10-year average and planted on 13mha. You could almost back-in NSW for a 10mmt+ type of harvest. VIC for 4mmt, SA back on track for a 4mmt crop, and WA could be building towards a 10mmt crop as well. We could make a pretty decent argument for a 28-30mmt wheat crop (assuming a good finish) with exports in the order of 12-14mmt.
The forecast rain is also a likely contributor to the fall in wheat values (CBOT futures) overnight. Locally, we will likely see basis levels retreat as well. We would expect cash values to be back $3-5/t as the trade wait to see where and how much rain actually falls.
BARLEY –
ABARES has Aussie barley production at 10.6mmt, up 10% from the long term average of 9.1mmt and planted on 4.4mha (up 8%). The record in 16/17 was ~13mmt, which on current area estimate, assumes an average yield of 2.95t/ha. Too much damage has probably been done to SA barley crops to achieve this type of average. However, bigger crops in NSW and VIC could help push the national crop towards this record.
Prices around $220/t are not particularly attractive (roughly decile 4) and are hard to make a firm commitment to. We suspect that feed values will fluctuate this harvest and respond to ‘nearby’ demand – that is rise and fall with shipping slot exposure or domestic requirements. Without solid export demand, expect prices to slide.
CANOLA –
ABARES has forecast production to increase by 40% year on year, to 3.2 million tonnes, 1% below the 10 year average of 3.3 million tonnes. The area is forecast to increase by 32% to 2.4mha, 6% below the 10-year average.
Canola may well be the shining light this harvest. European demand of 6.1mmt is going to consume all of the Ukrainian supplies (all GM) and still leave Europe needing to import from Canada or Australia. China is also looking to build its edible veg oil stocks. With Canada banned from exporting to China, Australia is again very well placed to pick up any additional demand.
Note of caution – China does not pay oil bonification, therefore any sales to China would likely be paid on a flat 42% oil basis.
Rain tipping the scales in favour of a big crop
Have any questions or comments?
image courtesy Aust Bureau of Meteorology
Click on graph to expand
Click on graph to expand
Data sources: Mecardo, Reuters, BOM, ABARES
Categories
Have any questions or comments?
Barley shows upside as harvest is held up
2023 Winter crop harvest has stalled with rainfall on the East Coast dampening progress. There is still plenty of grain and oilseed to still come
This wheat market is a real turkey
The wheat market hit multi-month lows this week after continued pressure from cheap Black Sea supplies and relief in the form of rain across parched
A halt to harvest
If you’re reading this, you’re interested in grain prices, and as such, you’ll likely have seen the weather forecast for the coming week. With rain
Soybeans pull the plug
After such a bright start to the week, the wheat market has again given way to bad habits. The precursor to the leg-up was ongoing
Want market insights delivered straight to your inbox?
Sign up to the mailing list to get regular updates to new analysis and market outlooks
Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
Research: Analysis of the Australian sheep flock
In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
SERVICES AND CAPABILITIES STATEMENT BROCHURE
We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.