All about the national and international grain market and how grain contributes to farm inputs and costs.
International and national summary
National background comments: report for the week ending 3rd May, 2019.
The next update will be on Friday 10th May, 2019. Direct links to reports on each dairy region immediately follow this international and national summary for grain.
Driving Prices Up
While it has been a week of declining prices in offshore markets CBOT wheat futures seem to have found a floor, at least for now, with this market having reached similar levels to what was seen in recent years when supply side pressures were the most acutely felt.
- Wet weather in the US Corn Belt has made for slow planting progress there and concerns that this could see acres shift from corn to soybeans has supported CBOT corn futures, somewhat offsetting weakness in neighbouring wheat markets.
Driving Prices Down
Over the past week offshore markets have remained under pressure, with the prospect of another big year of world grain production in 2019 driving this trend.
- The most recent International Grains Council estimates have projected that total world grain production will increase by some 2% in 2019/20.
- This week’s USDA crop progress report showed a 2% increase in the portion of the US winter wheat crop rated good to excellent, and this was one of the key drivers of the offshore weakness seen over the past week.
- Some dry winter wheat growing areas in the EU have also received rain recently, however some areas, including in Germany and Poland are still looking for further falls.
- StatsCan have recently released their acreage estimates for this year, with the price weakness in oilseeds created by Canada/China and US/China trade tensions seeing a swing out of canola acres, towards cereal crops.
Global Trade News
This week US officials have travelled to Beijing for further discussions on a US China trade deal and further talks are scheduled for next week.
- Given that there have been varying reports about when any deal might be reached by, grain and oilseed markets have been reluctant to take any direction from this issue.
- However, this is still seeing some demand shift from US to South American soybeans.
- The potential impact of African swine flu in China also shapes as having some impact on Chinese feed demand in the coming months.
- With the traditional start of the planting window (ANZAC Day) having come and gone weather and rainfall remains main focus of local grain markets.
- Should the rainfall event that was forecast to occur at around time of writing in NSW and Victoria eventuate, this rain may be enough for a “season break” to be “called”.
- While planting progress has been slow in some areas thus far, a later than ideal season break looks set to see a reduction in canola acres, with some of these acres shifting to wheat and barley.
- Across the country fairly similar price trends have been seen as of late, with wheat moving lower and barley moving sideways. Market liquidity for other grains remains low.
Price change in table below reflects moves since previous report (26th April, 2019)