Cropping update – May 2022
At a glance
- Australian grain reaches new levels on the back of continued supply chain constraints and an increase in demand from Asia.
- Canola sowing is close to complete in Western Australia after a period of dry weather.
- Tasmania wheat has had its first herbicide application and canola sowing is progressing well.
The Elders Weather outlook forecasts multiple cold fronts across southern and eastern Australia from 18 to 22 May and 31 May to 4 June.
The cold fronts are expected to bring widespread rain. In Western Australia (WA), the strongest cold fronts will start from 18 to 22 May and again from 29 May to 2 June.
From the field
“Most canola crops are now out of the ground as growers move on to sowing cereals.”
“It’s been a dry 10 days (to May 9) which is slightly concerning, but this has allowed most growers to get on with seeding in dry conditions. With rain forecast over the next week, most are comfortable with where they are currently at.
“Favourable commodity prices continue to underpin confidence among growers for the season ahead.” – Bill Moore, Elders Technical Services Manager, Western Australia.
“Winter wheat sowing is close to complete, with the first herbicides going out.”
“Most varieties of seed have sold out, but we still have clients chasing seed options, due to cropping rotations getting changed by the poppy forecast for the coming season.
“Sun Pharma have reduced their poppy sowing back to less than 1,000 ha, and Extractas Bioscience (formerly Tas Alkaloids) back to around 4,000 ha in total.
“Canola sowings are progressing well, particularly Hyola 970, supported by strong prices for the coming season. Several clients will look at sowing more Blazer TT canola towards spring.” – David Squibb, Elders Rural Products Specialist, Tasmania.
Aussie grain surges to a new level
Nathan Cattle from Clear Grain Exchange shares his thoughts on the current grain market in Australia.
Grain prices moved higher over the last month as continued strong demand lifted prices to a new level to secure more supply.
Australian grain remains in an enviable position while supplies from other global exporters remains constricted and uncertain into the back end of this year.
On top of this, in the last month the Australian dollar slid lower to 70 cents against the US dollar and international freight costs are holding firm as COVID disruptions continue.
These two factors further strengthened the competitiveness of Australian grain to our major export customers, particularly those in Asia given our closer proximity.
Local Australian prices are well supported now and remain competitive to win international business; however, we still have huge discrepancies in prices across port zones.
As shown on the table below, APW1 has traded $511/t port in Port Adelaide versus $452/t in Melbourne, $440/t FIS in Kwinana. These variations are typical across all grades and all commodities.
The difference in values is being driven by capacity of the supply chain to access more export demand, buyers managing their cashflow at high prices and very likely the availability and price growers are offering their grain for sale.
There is often more value available then the price being bid. There are also often more buyers that want your grain then you may realise.
Growers should remember that just like a buyer can show their bid price a grower can show their offer price.
*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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