Grain season outlook
As we approach the halfway mark of the 2017/18 season, it’s clear there are a number of factors in play impacting prices. Elders’ National Grain Manager, Lachlan Allen joined the Company earlier this year after having been involved in the grain industry for the past 12 years; he took a look at current market conditions and what’s impacting grain prices.
“First, if we reflect on the 16/17 season, nearly all port zones across the country produced above average yields, with SA and WA breaking state receival records. This high amount of grain saw the grain bid slowly slip away during the growing season as traders realised the true potential of the crop,” he said.
As harvest rolled around, grain continued to move and sold at a frantic pace and activity crept back into the market, as traders needed to finish off vessels, and this provided some selling opportunities for growers that held out through the harvest lows.
Mr Allen said seeding started to take off for the 17/18 season and there was not much news to start kicking the grain market in the upward direction.
Globally, there was a reasonably large harvest which was weighing on grain prices. With nearly all grain prices looking on the lower end of the decile readings, and the US growers responded by planting the smallest wheat crop in close to 80 years. Overlay this with a few unseasonal weather events and the crop in the US was not looking in a good position. In Australia, the promise of a good start was disappearing quickly when the expected rains didn’t appear. With close to all major Australian grain production areas recording low, to the lowest on record June rainfall, supply is starting to look a little tighter than anticipated.
“Over the last few weeks we have now seen prices rally all the way up to $300/t for wheat and $250/t barley. However, July has seen rainfall come back into some grain growing areas with bids easing $20-30/t, but grower selling remains limited as they wait for more rain to provide some confidence in the crop. The graph below from Profarmer demonstrates how quickly the National 17/18 APW multi moved over the last few weeks,” Mr Allen said.
The Elders grain marketing platform simplifies grain marketing for growers by delivering a single best price by port or site in real time. Elders are able to do this by working with some of the largest grain trading houses and end users who are active in the Australian market.
Take advantage of this platform by simply downloading the Elders Grain app via the App Store or Google Play, you can also find further information at www.eldersrural.com.au/daily-grain-prices or chat with your local Elders branch.