Cropping market – October update
At a glance
- Australian grain is still the most competitively priced in export markets. A slower selling pace this harvest could help preserve high prices.
- Queensland winter crop harvest begins with good yields for most but a late finish could impact supply from the Western Downs.
This week the United States Department of Agriculture (USDA) released a glowing outlook for Australian cropping as harvest gets underway in northern states.
Wheat exports look set for another big year, estimates for the October to August marketing year (MY) sit at 23 million tonnes, down just 1 million tonnes from a near record year in 2020/21. For the first 11 months of the 2020/21 MY wheat exports to Indonesia and Vietnam increased by 583 and 374 per cent (pc) respectively, driven primarily by a shortage of wheat exports from the northern hemisphere.
The Elders Weather rainfall outlook suggests multiple cold fronts will develop across the country from 26 October onwards. These are expected to bring widespread rainfall particularly in eastern Australia. In Western Australia the strongest cold fronts will develop from 27 October and reoccur during November, bringing widespread rainfall.
Irrigators continue to have access to unregulated flows along the River Murray and Edward-Wakool system. The River Murray currently has active storage of 7,956 GL, an increase of 19 GL in the past week.
From the field
“Winter crop harvest has commenced in Queensland and crops that had access to moisture are performing well. However, in parts of the Western Downs a late dry finish and some hail damage is expected to impact yields and quality.
“For summer crops, storm activity in the coming weeks is likely to provide widespread rainfall however wet conditions could lead to a range of pests including helicoverpa, mirids and fall army worm, which have maintained a viable presence over winter. In addition to pests, the high likelihood of a wet summer could equate to increased weed pressure. Farmers need to act now to secure chemical supplies in what is a disrupted supply chain. Applying pre-emergent and fallow weed controls should be front of mind. Grass control in crop will provide challenges for summer cereal producers. Herbicide tolerant varieties should be part of the whole program to increase options and security of yield.
“Overall, Queensland cropping farmers remain buoyant about harvest and the start of the summer crop season. Those with livestock will look to make the most of forecast moisture to maximise silage and home-grown feed.” – Maree Crawford, Elders Technical Services Manager, Queensland and Northern Territory.
The world needs Aussie grain
Nathan Cattle of Clear Grain Exchange (CGX) provides his thoughts on local markets.
“The first of the early crops are starting to be harvested and delivered into warehouses around Australia with other areas receiving some hopefully beneficial rains,” he said.
“Grain values improved further since last month, with Australian grain still the most competitively priced grain into major grain importers versus other major exporting nations (by more than US$40/t in some cases).
“Hence, Australian grain does not have to get cheaper to keep winning export business, in fact it could improve, and we could still be winning export business comfortably. The world needs Aussie grain. The largest downside risk to grower prices is likely how growers decide to sell their crop in coming months. If multiple growers sell a lot of grain quickly, it’s likely to push values lower.
“A slower selling pace from Australian growers will help to underpin prices. Australian growers should know that your behaviour can have a large impact on prices you’re receiving at the farm gate, particularly when the world needs Australian grain.”
“With Australian grain still the most competitively priced into international markets by some margin, Clear Grain Exchange gives you the option to warehouse grain and offer it at the price you want to sell to all buyers rather than accepting published bids.”
*Published bids refers to publicly available data from major grain buyers.
Sources: USDA, Murray Darling Basin Authority, Clear Grain Exchange and RBA.
The information contained in this article is given for the purpose of providing general information only, and while Elders has exercised reasonable care, skill and diligence in its preparation, many factors (including environmental and seasonal) can impact its accuracy and currency. Accordingly, the information should not be relied upon under any circumstances and Elders assumes no liability for any loss consequently suffered. If you would like to speak to someone for tailored advice relating to any of the matters referred to in this article, please contact Elders.
Want to control the selling price of your grain? You can through CGX.