In this month’s edition of the Elders Cropping Update, we cover recent analysis from the US Department of Agriculture (USDA). Also included is from the field commentary from around Australia as farmers gear up for sowing in winter cropping areas and wrap up harvest in summer cropping areas.
Clear Grain Exchange provides detailed analysis on the latest price spreads, explaining why global prices have softened and how Australian grain has managed to hold firm.
World corn production has been revised down this week according to the USDA, driven by reductions to the crop in Argentina. World supply of corn remains tight with limited substitution options, feed wheat is expected to play a role in filling the gap.
World wheat production has again been revised higher this month due to larger crops in Kazakhstan, Australia and India. Australia is expected to export a record volume after the 2022-23 harvest came in at 39 million tonnes, according to the USDA. Prices have slipped under the weight of supply but remain at a favourable level.
The Australian Summer Grains Conference will commence on 13 March with an extensive list of speakers on show. Elders is proud to be platinum sponsor of the event in what will be the fifth edition.
From the field
“After a later than usual harvest, dry conditions have, in many areas, put a break between seasons.
“The cool, wet spring/early summer conditions have not done any favours for horticultural or summer cropping regions. Early yield indications for tree and vine operations are for mixed to reduced yields following difficulty in managing disease programs. With cotton and rice crops it remains to be seen what impact the slow start will have, and mild summer will have before harvest gets into full swing.
“In winter cropping areas, the focus has been on tidying up fallow weed control to retain moisture and plans to deal with high stubbles loads and wheel tracking during harvest before sowing this year’s crop.
“There has been a noticeable shift towards autumn conditions in southern regions, and with it, increased activity over recent weeks to get ready for renovating flood affected pastures and begin early winter cropping programs.
“The falling fertiliser market has created some hesitation in farmers locking into fertiliser requirements early, especially nitrogen. An early break would put significant pressure on trucking logistics to get starter fertilisers out and up country from port storages which are at capacity.
“The quality and purity of seed inputs, especially farmer retained seed, requires careful attention this season to ensure weather at harvest and conditions during storage has not compromised germ and vigour, soil-borne disease status or weed seed contamination.
“Crop protection inputs costs have also been returning to previous norms which will be a welcome relief to farmers. Weed blow outs are common after a wet season (for example, the 2016 season), increasing weed pressure in the following season and requiring careful planning of crop rotation and pre-emergent herbicide programs. There continues to be a move to integrate more graze & grain, hay, legume or pasture ley options back into the mix of farming enterprises to mitigate seasonal risk and heightened weed and disease pressure in 2023.
“In many cases, good subsoil moisture and reduced inputs costs should give growers a degree of confidence to kick start the 2023 season.”
Craig Farlow, Elders Technical Services Manager, Victoria.
“Sorghum harvest is in full swing with some good yields coming off.
“Cotton is starting to cut-out, but it has been a difficult season with a wet, cold start and now hot dry conditions. There have been some mite issues in some valleys that have been difficult to control.
“There is good subsoil moisture for winter crops, however we need some widespread rain between now and sowing to join it back up and allow sowing to commence.”
Sally Broadhead, Elders Technical Services Manager, New South Wales.
“We have had a dry finish to summer which allowed the last of the harvest to be completed with a record crop of 26 million tonnes.
“Summer spraying hasn’t really featured for most as dry conditions since the start of summer has reduced the need for this.
“Many farmers are now preparing paddocks for the 2023 season with soil amelioration work and stubble management.
“With a softening of some input prices growers are holding back from taking delivery, there could be some logistic concerns if they don’t start moving to get their requirements in place before the seeding.
“Interest in canola is continuing to be strong with a high demand for hybrid seed. There has also been a move to the newer GM and stacked technology varieties which are now available.”
Bill Moore, Elders Technical Services Manager, WA.
“Headers are racing through grain sorghum crops as we speak in an endeavour to complete the harvest in Queensland before the predicted rainfall event occurs. Grain sorghum crops are coming off by the hour and the highest price we have seen for grain sorghum is an added incentive to get it into silos or receival depots. Some crops are showing levels of screenings but growers are reasonably happy with the yield.
“This rain event will be timely as profiles are drier than expected with cotton, late sorghum and mungbean looking for moisture to finish.
“Cotton crops are on their fourth watering in a number of cases and are still variable in stage due to the cooler summer in Queensland.
“Final irrigation starting soon on more advanced cotton crops. There are several paddocks showing high levels of Fusarium infections that are going to impact on yield and quality of the crop. There are some handy mungbean crops around and they seem to be faring better than some other crops for moisture stress.”
Maree Crawford, Elders Technical Services Manager, Queensland and Northern Territory.
“The Northern Territory cotton crops are powering ahead however some paddocks are showing signs of heat stress at pollination and there is a degree of abnormal formation of bolls (pigeon beak).
“Wet weather delayed planting for most growers and many crops went in later in the optimum planting window however the plant is still substantially ahead of last season.
“Pests continue to be problematic in this environment as is expected with new chemistry being utilised to support BMP programs. The large area that has been affected by the rain change is inaccessible at present so assessments on how these paddocks are affected will take some days yet.”
Maree Crawford, Elders Technical Services Manager, Queensland and Northern Territory.
Grain demand more selective
Nathan Cattle from Clear Grain Exchange shares his thoughts on the current grain market and what’s been happening on the exchange.
Australian grain markets have been very active since the last Elders Cropping Update with the winter crop harvest now all but complete and another record-breaking season in many parts of Australia.
On the topic of records, a new monthly record was achieved in February with over 940,000 tonnes trading through Clear Grain Exchange. 385,564 tonnes traded in one week.
It’s rewarding to see growers achieving the price they were asking for. Often these values were well in excess of the best published bids and at levels growers may not have realised were available.
In the last two weeks, demand for Australian grain has become more selective. International wheat futures have created a downward lead for global cash prices.
Thankfully, Australian grain appears to remain competitive into global physical markets and so prices here have been able to hold relative to weakening futures.
WA grain appears to be priced the most competitive followed by SA and then the east coast with reports many grades out of the eastern states have become difficult to make work given the higher risk and costs associated with internal logistics.
The result is buyers of Australian grain have become more cautious and are searching grain offered for sale, crunching their numbers and bidding for those parcels they can make work.
This has seen strong demand for particular grades in specific locations, albeit that it can be less predictable for growers and their agents.
Growers that like prices now but want to defer delivery and payment into future months such as July, are actively offering grain for sale in the July month on the exchange.
At the time of writing, grain trading in July on CGX was $5 per tonne above trades of the same grade with prompt delivery in a number of locations around the country.
Australian grain remains in demand and growers have the ability to assess what they have and ask for a price from the market they deem is fair value for their grades. There are also options available for growers to manage their cashflow and risk.
Create demand for your grain and offer it for sale at the price you want, whilst being protected by anonymity and secure settlement.
Market indicators
"I sell wheat and barley through CGX and usually achieve above the market value as advertised in the current market."
- Jeff Burgess, grain grower, Gulnare, South Australia.
Learn more about Jeff's experience with 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.