Cropping market update

Spring is upon us in this edition of the Elders Cropping Market Update, a critical time of the year especially for the winter crop. 

Sunny days in Western Australia have spurred along early sown crops, however the season has been cooler than normal with later sown crops slower to respond after a cold July. In New South Wales the tale of two seasons continues with some areas receiving good rain in August while other crops could use some rain particularly to the northwest of Forbes and further north around Narrabri. 

Grain prices strengthened this month in response to conflict in Ukraine and China’s announcement they would remove the import tariff on Australian barley. Barley prices increased by $21-48/tonne across multiple ports during August. 

From the field

Western Australia

“This is a great time of the year for watching crops grow. In WA we have had some good sunny days which is allowing crops to really perform. Early established crops continue to do well with the later crops still showing the effects of a cold July.

“Soil moisture will be the telling factor as we move towards spring, while some areas are appreciating some sunshine other marginal areas are seeing the signs of moisture stress which dictate the ability of the crop to finish, a stark difference to the two previous seasons.

“The season has been cooler than usual; this has slowed the onset of many disease and pest issues. Growers are vigilant to these factors; we have not had any major issues to report. 

“Crops will become stressed over the next month; this may have an effect on pests such as Aphids and Native Budworm. Close monitoring will decide if management measures are required for these pests.

“Hopefully see everyone out at field days over the next few weeks.”- Bill Moore, Elders Technical Services Manager, Western Australia.

New South Wales

Forbes

“The season in the central west is generally up and down at the moment. The Forbes area has received close to an inch of rain in the last couple of weeks and most crops in the local area are looking good for now especially after a dry start. Other areas have not been so lucky and didn’t receive as much rain. As you move onrth and west of Forbes, it really dries off, with a lot of crops relying heavily on a good September rain to keep them going.

 “While there is not as much pressure as last year, the recent rain in the area has kicked off some stripe rust issues in wheat, particularly highly susceptible varieties with some fungicide spraying happening at the moment. Aphids have also been an issue as of late, with spraying occurring in patches for Russian Wheat Aphid in cereals, other areas have seen below threshold levels, but we are monitoring closely.

“Insect pests in crops will need to be monitored closely over the next month. If conditions stay dry, we could see some high pressure in the area especially in the later sown and/or stressed crops. Rain over the next month will be the biggest challenge however, with the shortage of urea during the season, a lot of crops are starting to run out of nitrogen and good rain over the next month will be key to get them through.” - Reece Davie, Elders Agronomist, Forbes.

Narrabri

“We have had a dry couple of months around the Narrabri area. The crops are all needing some rain to keep things ticking along. 

“Faba beans are flowering and podding nicely, with a little bit of grub pressure in some areas. Canola is mostly out in head, so the B&W Rural Agronomists are on the lookout for aphids. 

“Disease pressure across all winter crops is minimal with the dry weather, however they are expected to become more of a concern when it does rain.

“The main concern for my growers over the coming month is the lack of rain. There are many crops in the ground which will need a decent fall of rain to ensure we have something to harvest.”- Emily Young, Elders Agronomist, Narrabri.

Grain prices strengthen

Eddie Prevost, Business Development Manager for Clear Grain Exchange shares his thoughts on the current grain market and what’s been happening on the exchange.

Australian grain prices have improved across most commodities, grades and locations in the past month, as buyers have pushed their bid prices up to meet seller offers and secure supply of grain. Many growers have achieved their target prices and sold their remaining old season grain from warehouse or continued to sell into the rising market whilst also offering more for sale at higher prices. 

This month 62 different buyer businesses purchased grain through Clear Grain Exchange, with over 550,000 tonnes trading, outweighing July’s stats on both fronts. 

Weakness in the AUD, continued volatility in the Black Sea, tight global supplies, and China’s removal of tariff barriers on barley imports are some of the major factors attracting more buyers to the Australian grain market and elevating local prices. 

The United States Department of Agriculture (USDA) released its World Agricultural Supply and Demand Estimates (WASDE) for 2023/24 this month. 

The report forecast reduced production for wheat, barley and canola, however this was offset by similar reductions in consumption volumes, leaving global grain balances generally unchanged from previous forecasts.  

The wheat global stocks-to-use ratio, which highlights the balance between supply and demand, fell slightly from previous forecasts. Excluding China, the ratio remains around 20pc which is historically tight and a key influencing factor for Australian grain demand moving forward.

Strong demand for barley continued this month with buyers actively searching grower offers and pushing bid prices up to match. In the hours after China’s announcement that they would remove the import tariff imposed on Australian barley, over 25 different buyers purchased 115,000 tonnes through Clear Grain Exchange. A number of grower offers traded up over their offer price as buyers vigorously competed with each other to secure grain.  

Canola prices have also seen strong gains this month. Production uncertainty in key growing areas of Canada and robust biofuel demand continue to see buyers seeking to secure supply from Australia. 

Unabating dry conditions across the East Coast are seeing uncertainty creep into the market regarding 2023/24 harvest supply. NSW and QLD regions are likely to see reduced production if conditions persevere, which has seen price spreads between port zones widen in the market and the Darling Downs trading as a drought market. 

There is demand for Aussie grain, however often it can be a difficult job for buyers to find and purchase the grain they’re after. Buyers are often unaware of what grain is available, where it is located and importantly what prices the seller is looking for. 

By offering your grain for sale on Clear Grain Exchange, you make it easier for every buyer to see your grain and try to buy it - that's a good thing, because we want as many buyers as possible trying to buy your grain.

You're protected by anonymity and secure settlement at all times. All you need to do is decide what price you want for your grain - the rest is looked after for you.

Regardless of what grain you have in warehouse or whether you want to sell in the near-term or are prepared to target higher prices and potentially hold grain for longer; get it on offer so all buyers can see it and try to buy it.

Market indicators

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.