Cropping update – July 2022 - Elders Rural Services
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Cropping update – July 2022

At a glance

  • Wheat futures prices correct in dramatic fashion, dropping to pre-Ukraine war levels, but have we reached a floor?
  • Western Australian croppers take a conservative approach to the season as Tasmania remains poised to outperform last year’s production levels if conditions don’t get too wet.

Local conditions

The Elders Weather outlook forecasts multiple cold fronts across southern and eastern Australia from 17 July to 25 July, with the potential for rain originating from the tropics and moving south from 26 to 30 July. In Western Australia (WA), the strongest cold fronts will start from 17 to 25 July.

From the field

Western Australia

“WA conditions have started to dry off, so while many activities such as in crop weed control and nutritional requirements have been managed, many growers are taking a conservative approach on their expectations for the season.

“Some of the key issues that have appeared in this year’s crop include net blotch in barley and red legged earth mites in pastures and broad acre crops.

“Traditional approaches to controlling net blotch in barely are losing their effectiveness which is forcing growers to rethink their strategies. While increasing resistance and restrictions on chemical control has caused concerns over the economic impact of red legged earth mites.” – Bill Moore, Elders Technical Services Manager, Western Australia.

Tasmania

“All crops look well this year compared to last year, which saw crops suffering through water logging, crops were yellow, and we were losing areas. So far this year it hasn’t got too wet, crops are still growing and look solid.

“Canola is being grazed, and wheat and barley are having post-emergent herbicides applied, with crops ranging from three leaf to mid tillering. There are also a few late crops around which are less advanced.

“Our biggest challenge is a rapid decline in price which is more pronounced in TAS. Also, the prospect of a really wet July and August.” – David Squibb, Elders State Rural Products Specialist, Tasmania.


CBOT plunges lower, dragging Australian prices

Nathan Cattle from Clear Grain Exchange shares his thoughts on the current grain market in Australia.

A tough month for grain markets, with Chicago Board of Trade (CBOT) wheat futures getting smashed lower as the northern hemisphere harvest coincides with global markets falling due to money managers wanting to hold cash rather than risk.

Speculators have sold down their bought positions in CBOT futures, pushing values to pre-Ukraine/Russia war levels.

Reports in the last week of new international sales of wheat cargoes was welcome news for the market looking for firm price indications.

The traditional buyers of north Africa and the Middle East have been active in purchasing cargoes and reportedly new business into Asian countries continues.

The sale prices when worked back to Australian grower prices indicate that Australian wheat remains very competitive internationally at current grower bids.

The offshore business may have helped stabilise prices here in Australia despite the dramatic weakness in CBOT wheat futures.

Bids placed on offers or resulting trades on Clear Grain Exchange continue to be much stronger than published bids, although demand has been sporadic.

Australian buyers are taking a cautious approach to purchases given the weakness in all markets and prices have done a lot of work to the downside. Have prices reached a floor?

Remember: Australian growers also have a say in the price you receive. You have the power to offer grain for sale at the price you want and let all buyers try and buy it rather than accept published bids.


Market indicators

table-cropping-update-july22
Table shows traded grain prices from Clear Grain Exchange.

*Published bids refers to publicly available data from major grain buyers.

Sources: Elders Weather and Clear Grain Exchange

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.

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