International and national summary
National background comments: report for the week ending 18th September, 2020.
The next update will be on Friday 2nd October, 2020. Direct links to reports on each dairy region immediately follow this international and national summary for grain.
Driving Prices Up
The USDA announced further declines in crop condition ratings for good/excellent US soybeans and corn. Dry conditions across the US Midwest account for most of the yield loss in the past month.
- Strong Chinese demand for US corn and soybeans continues to support CBOT futures, with this spilling over into other markets.
- China has stated that summer typhoons have impacted feed and grain production, which has resulted in China increasing feed grain imports to rebuild their pig herd after it was decimated by the African Swine Fever outbreak.
- Dry conditions in the Ukraine have led to the least favourable winter wheat planting conditions in around ten years.
Driving Prices Down
The World Agricultural Supply and Demand Estimates report for September suggests 2020/21 world wheat production will reach 770.5 million tonnes, a new record. This should keep pressure on global wheat prices.
- Increases in wheat production in Australia and Canada is likely to limit significant wheat price rallies in these countries.
- Global feed grain production continues to outpace consumption, which should keep the pressure on major feed grain prices.
Global Trade News
Several large wheat tenders have been booked recently, with origins being spread between Russia, Poland, US, Canada, and Australia. This indicates pricing levels in these countries are competitive enough to capture wheat demand.
- The Saudi Arabia wheat tender saw 645,000mt of 12.5% milling wheat booked at an average of $US 251/mt. This is a significant price increase from their April tender that average $US 233/mt.
- Egypt grain state buyer announced additional wheat tender results, with Russia filling four cargoes and Poland securing a cargo for the first time since 2015. The average price of this 235,000mt tender was $US 249/mt.
- US wheat prices has become competitive within the global wheat trade, securing 57,000mt of the Japanese MAFF tender and 28,000mt of the South Korean SPC tender, with the $US remaining comparably weak against other major world currencies.
- Australian ASW has secured 22,685mt of the Japanese MAFF wheat tender announced on the 14 September. This indicates Australian grain is competitive on the global wheat trade which may provide support to local prices.
- Winter crops continue to progress across Australia, with NSW continuing to have an exceptional season. Parts of SA and WA are looking dry and in need of rainfall.
- Spot cereal prices have steadied over the week, with liquidity low as interest shifts toward new crop.
- Grower forward selling has been steady, with new crop wheat prices having firmed in recent weeks and barley rebounding slightly.
Price change in table below reflects moves since previous report (11th September, 2020)