Cropping update – March 2022
At a glance
- Volatility stemming from the conflict in Ukraine continued to push grain prices to extreme levels in March.
- Australian grain to remain in high demand as buyers reassess price and position in the coming weeks.
- Western Australia is poised to kick off sowing, but conditions are dry, as eyes turn to the sky for an autumn break in early April.
The Elders Weather rainfall outlook suggests multiple cold fronts over the next two months starting from 22 to 26 March and 11 to 15 April.
These have the potential to produce widespread rain over southern and eastern Australia. In the west the strongest cold fronts are expected between 28 March and 5 April and 13 to 17 April.
From the field
“Farmers are gearing up for sowing with paddock preparation and ensuring they have inputs on farm. Conditions have been dry ahead of the anticipated autumn break.”
“There are concerns over the upward pressure on inputs such as fuel and urea, however, with strong commodity prices confidence levels are up heading into this year’s cropping program.
“Dependent on rain and the arrival of seed, many growers will be keen to get their cropping program (especially canola) started in early April.” – Bill Moore, Elders Technical Services Manager, Western Australia.
Demand for grain reaches extreme levels
Nathan Cattle from Clear Grain Exchange shares his thoughts on the current grain market in Australia.
Grain markets have been reacting to the unfortunate events occurring in the Ukraine. The Chicago Board of Trade (CBOT) wheat futures closed limit up in many sessions through last month, to reach all-time highs before correcting lower more recently.
The market has been trying to get a handle on the impact of the Russia/ Ukraine conflict – what it means for global grain supply and demand, which has resulted in significant price volatility.
This has flowed through to demand for Australian grain rising to extreme levels as buyers have pushed up prices to try and secure grain. The world already needed Australian grain this year and the Russia/ Ukraine events have magnified this further.
Tempering some of this demand has been the unfortunate flooding events that have occurred in some parts of the country. These events are putting an already strained supply chain under more pressure as it inhibits the movement of grain to port.
CBH recently released more export capacity in the west which was received very positively by the market.
The flooding, along with a softening CBOT market has contributed to some buyers taking a more cautious and selective approach to accumulations in the last week, hesitant to keep pushing prices higher.
Many growers have seen their target prices reached over the past month and have been selling grain held in warehouses on the back of the lift in values. Many were also actively adjusting their offer price targets as they monitor the evolving situation and/or are happy to stand aside from the market while they adjust their price expectations.
Such is the strong demand for Australian grain that in the past month there have been two weeks where 49 different buyers purchased grain through Clear Grain Exchange, with even more searching for grain listed for sale. Demand is for all grains, all grades and across all locations. In many cases the prices traded are very different to those advertised on cash boards or on indicative bid platforms.
Grain demand can often be hard to predict – if you have your grain on offer at least all buyers can see it and try to buy it – which creates demand for your grain.
*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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