16 July 2021
Weather & Crop Conditions
Rainfall this week was heaviest throughout Western Australia, Northern NSW and the Southern QLD boarder region.
Western Australia continues it’s incredible start to the season, with falls throughout Northern regions that have missed out over the last few weeks. Early planted crops are likely to see the highest yield potential with the season to date, however if trends and the excellent two weeks forecast eventuate, wheat will be moving towards top percentile yields.
Rainfall on the east coast wheat belt was heaviest in the north, with the Liverpool Plains through to Roma all receiving excellent rainfall. Crops throughout NSW and Queensland are in excellent shape with sufficient subsoil moisture to keep development moving between rainfall events.
South Australia and Victoria had scattered falls of lesser volume however the falls that did occur in North Western and Western Vic will keep crops recovering after a poor start to the winter growing season. Two-week forecasts for Victoria and South Australia are good with great rains expected to flow over from WA and provide moisture to both states.
Rainfall for NSW and QLD are expected to be isolated although there is potential for small storms to provide heavy falls.
The market at a glance…
|This Report||Last Report||Change|
|CBOT Wht USC/Bu (Spot)||672||612.25|
|CBOT Corn USC/Bu (Spot)||564.25||643|
|ASX Wht AUD/MT (Nov 20)||$299||$291||+$8.00|
|ASX Bar AUD/MT (Nov 20)||$245||$247||-$2.00|
Wheat – Global
Global wheat values have been extremely volatile this week with the ongoing and forecasted dryness in the Northern US and Canada seeing Minneapolis wheat futures jump with other US futures soon following.
Crop conditions in North America’s spring wheat area has been poor for months although there has been time for heavy rains to turn the trend around. Although there have been falls, moisture deficit remains across the spring wheat area and when combined with the very hot and dry two week forecast, yields and quality expectations are starting to be drawn back.
This sentiment has seen wheat break lockstep with corn as profit taking across corn contracts has seen wheat develop a premium over corn.
Europe and the Black Sea are also having their own wheat concerns although stemming from very different weather events.
France has continued to see heavy rainfall which has supported concerns and prices for milling wheat quality. In Russia, underwhelming yields are being reported likely due to the hot and dry winds that have been prominent throughout their spring wheat zone. Despite these concerns there is still plenty of wheat making it’s way into markets with GASC’s recent tender being filled by Romanian new crop whilst Ukrainian and Russian offers are adding weight to Northern Hemisphere harvest pressure.
Coarse Grain – Global
US corn futures have reacted to a bullish July WASDE report this week, seeing prices rise later in the week off the back of lower global stocks and concern for the US crop.
The July WASDE report saw the Brazilian corn crop reduced to 93MMT making this the third WASDE report in a row to see Brazilian production cut. The cuts to Brazilian production confirm that South American corn exports are likely to start drying up in September and October putting more importance on the US growing season.
Conditions in the US are less than ideal throughout the North due to lack of moisture and the South due to excessive rain.
In barley markets China has returned to start purchasing again, reportedly buying Ukrainian who are offering aggressively whilst harvest continues.
Turkey purchased 440kmt of feed barley this week with Black Sea origins unsurprisingly taking out the entire position.
Wheat – Australia
Australian wheat markets have followed the international rally in wheat with old and new crop seeing flat price rallies.
Offshore markets were the main driver for price rallies, the Canadian prairies are under serious moisture and heat stress whilst the EU and Black Sea are experiencing their own quality and yield concerns.
Whilst the rest of the world starts to contemplate record low exporter stocks, Australian conditions are excellent and keeping a lid on price increases.
Track pricing moving north of $300 is seeing tentative old and new crop engagement from growers with their crops currently on track for above average yields.
Although wheat prices are historically good for current conditions, canola hitting $800 is potentially keeping growers out of wheat marketing.
Coarse Grains – Australia
Sorghum markets continue to trade sideways this week, with harvest continuing in Central Queensland and grower selling pace being matched with container and bulk sales.
Export dmeand remains strong and Australian sorghum is moving at a quick pace compared to the size of the crop.
Australian barley markets have been flat and looking for direction this week.
In old crop, increased offers have been seen however there has been little engagement from buyers or the trade.
Grower engagement in the new crop is non-existant considering the lofty prices of canola and wheat with buyers also willing to wait crop development.
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