Cropping update – June 2022 - Elders Rural Services

Cropping update – June 2022

At a glance

  • Australian winter crop production tipped to be the fourth largest on record in 2022-23.
  • Western Australia has had a good run with sowing but crops are now looking for rain. In contrast, New South Wales has experienced waterlogging in certain regions preventing machinery from getting onto paddocks.
  • It’s been an up and down month for grain prices resulting in a stand-off between buyers and sellers in the Australian market.

Local conditions

The Elders Weather outlook forecasts multiple cold fronts across southern and eastern Australia from 28 June to 2 July, with the potential for rain originating from the tropics and moving south from 13 to 22 June. In Western Australia (WA), the strongest cold fronts will start from 21 to 25 June.

The latest June ABARES crop report forecasts the second highest winter crop by area for 2022-23, totalling 23.4 million hectares. Winter crop production is tipped to reach 50.9 million tonnes, which would make the 2022-23 harvest the fourth largest on record. However, wet conditions in parts of Queensland and New South Wales have resulted in a reduction in planted area, offset by gains in other states.

Canola production is forecast to increase to 5.6 million tonnes, an increase of 47 per cent on the 10-year average, which would make 2022-23 the second largest canola harvest on record. Wheat production is forecast to reach 30.3 million tonnes, 22 per cent above the 10-year average, which would translate to the fourth largest wheat harvest on record.

While production is expected to be higher across the board, largely driven by the increase in area planted, it should be noted that there is potential for higher fertiliser and fuel costs to impact yield. Many growers will be weighing up the economics of chasing yield gains against a backdrop of high input prices.

From the field

Western Australia

“The crop is practically in for WA for this year, estimates suggest a similar area to last year.”

“While early rain in most areas allowed for a good run with seeding, many areas are now becoming dry which is stressing young emerged crops.

“The focus has now shifted to spraying, with much of the canola having already received one to two Glyphosate sprays, depending on the crop stage.

“Most cereals are looking clean due to a good knockdown opportunity; this is giving growers some flexibility in decisions on post emergent weed control.

“A discussion point has been what will be the nitrogen (N) strategy for this year. Currently the weather conditions are ideal for applying nitrogen, but with unconvincing weather forecasts and the high price of N there is reluctance from some growers to spend extra at this stage of the crop.” – Bill Moore, Elders Technical Services Manager, Western Australia.

New South Wales

“New South Wales has had a very wet sowing season; many winter crops were unable to be sown and there has been lots of canola re-sown.

“It’s been difficult to get on crops to get early sprays on and growth has been fairly slow due to water logging. We are anticipating a high level of disease this season given the climatic conditions, high stubble loads and green bridge.” – Sally Broadhead, Elders Technical Services Manager, New South Wales.

Grain markets correct from the highs

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

It’s been a wild month for grain markets, new price highs were triggered by a USDA WASDE report flagging tightening grain stocks and India banning exports. More recently Chicago Board of Trade (CBOT) wheat has since been smashed lower on the back of rain over poor crop conditions in Europe and North America and speculation over grain being exported from the Ukraine.

This has provided a softer lead to local markets in recent weeks. Many buyers appear relatively comfortable with cover so they can be patient on accumulating more for the moment.

There is a bit of a stand-off in Australian grain markets. Buyers are trying to pull back bids while growers and their agents are somewhat reluctant to adjust price expectations too much.

This has seen lower grain volumes trade over recent weeks however, generally engagement on both sides of the market remains high with buyers searching for grain, and sellers looking for bids and/or offering grain for sale.

Despite the recent weakness in CBOT, Australian grain continues to be sold offshore with trade margins on paper at least remaining largely intact.

Hence physical market values aren’t moving to the same extent as CBOT however traded values have softened significantly from the highs reached just a few weeks ago in most areas.

Make sure you have your grain on offer to give it a chance of trading at its full value – there’s no downside and there’s plenty of buyers searching for grain offered for sale.

Market indicators

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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