Prices receive support in June as weather conditions influence both local and international growers.
Rainfall across Western Australia (WA) has set the season on a different path compared to a month ago which is pleasing for growers. South Australia (SA) received large amounts of rain in June which were favourable from a longer-term point of view, however, the increased moisture levels have led to weed and disease pressure.
Local grain prices were volatile in June on the back of Northern hemisphere weather outlooks. Canola prices received support as buyers were forced to increase prices to match grower expectations. Trent Smoker, General Manager of Clear Grain Exchange provides an in-depth look at markets below.
The three-month rainfall outlook from July to September has changed with a higher chance of exceeding median rainfall across much of Queensland and Central Australia. The outlook remains drier for parts of WA, Victoria and New South Wales. For a detailed 28-day rainfall outlook visit Elders Weather.
From the field
Western Australia
“June has seen a major turnaround in conditions in WA, with most agricultural regions receiving significant amounts of rainfall. This has given growers the confidence to complete the sowing program for this season.
“With the large amounts of rainfall, it has quickly become problematic to get across many paddocks. Activities such as Nitrogen top ups and early season pest control have been challenging. While it is wet it has also come in cold. While this has slowed up growth rates in crops, it has also reduced the presence of many issues such as insect pests and disease.
“Challenges for growers this year are varied, including slugs and snails which have survived over summer in some of the thick stubbles from last year. With slow growing crops these pests have caused issues in many areas. Control is not always easy as baiting has variable results.
“We are seeing a high presence of net blotch in barley this year. It is concerning seeing it this early in the year as many varieties have a low natural resistance, therefore will rely on fungicides to control.
“It’s pleasing to see a full profile of moisture in many areas of the state at this time of the year. It puts everyone into a positive frame of mind as we head into some longer days and ideal growing conditions.” - Bill Moore, Elders Technical Services Manager, Western Australia.
South Australia
“The season is shaping up to be above average, with above average rain in June across most of the state. In many areas thunderstorms have made some paddocks inaccessible due to water logging.
“Most areas have finished seeding but a few paddocks are still to be sown and will struggle as the day temperatures have declined making crop growth slow.
“A few diseases are staring to pop up such as powdery mildew and Septoria in wheat. In earlier sown wheat, considering the rainfall we have had, it comes as no surprise with higher inoculum carryover from last year's crop residue.
“Early sown canola is also expressing early blackleg infections and will put pressure on the varieties which don't have a blackleg seed treatment such as Saltro or Ilevo.
“Fungicides will be in high demand again if these cropping conditions continue and every spray day will need to be utilised this year.
“Other pests such as slugs and snails have been busy eating early emerging crops and baiting has been required, reminding us to try and get the timing right to control them earlier and reduce egg laying.
“Most of the pre-emergent herbicides have worked well this year with good control of the target weeds, and we will wait to see what later germinating weeds will get through.
“The main challenges growers will have is getting a window to spray and will need to keep the rates up as weeds will be larger than preferred.” - Lyndon May, Elders Technical Services Manager, South Australia.
Victoria
“All the hype around El Nino has quickly dissipated following strong, widespread rainfall totals for June. Whilst we remain cautious, we are now looking at a decent season given the amount of moisture in the profile.
“Post-emergent sprays are well underway, however finding good spray days has been challenging with the wind, wet weather, and paddock trafficability creating issues. It can be a logistical nightmare this time of year with farmers simultaneously trying to complete stock work, spreading, rolling and carting grain during shorter days with unfavourable weather.
“Mice were very active around Swan Hill during late May/early June however following rapid baiting and cold weather activity, has slowed down. In terms of early disease, net blotch is showing up in barley, stripe rust and powdery mildew in wheat, as well as early reports of ascochyta and sclerotinia white mould in lentils.” - Pat Conlan, Elders Agronomist, Swan Hill.
New South Wales
“The seasonal outlook varies across the state with the Southern NSW region around Young, Cowra and Goulburn having had good rainfall with full soil moisture profiles.
“Central NSW remains mixed, with good soil moisture at depth which would benefit cropping around Trangie and Dubbo if we had some more rain to connect the profile.
“Growers are looking for more rain in the north-west of the state with crops hanging in there on only 2-5ml rainfall events.
“Red legged earth mites and blue oat mites are starting to impact pasture crops around Young and Cowra. While slugs have slowed down across the state with growers continuing to monitor.” - Lauren Marchant, Elders State Rural Products Manager, New South Wales.
Northern hemisphere weather creates price volatility
Trent Smoker, General Manager from Clear Grain Exchange shares his thoughts on the current grain market and what’s been happening on the exchange.
Local prices continue to remain volatile as buyers and sellers react to international news reports. Weather forecasts, the world balance sheet and evolving geopolitical news in the Black Sea remain some of the major drivers in the current market.
CBOT wheat futures reached a 12-week high this month as doubts grew on US production in key growing areas. Recent USDA reports have suggested wheat, soybean and corn production expectations are all below the initial estimates made at the start of the northern hemisphere growing season. This week however, a more favourable weather forecast for key growing regions of the US removed some risk premium from the market and put pressure on CBOT futures.
Any news of an escalation of conflict in the Black Sea continues to play on world prices. Recent reports suggest that Ukraine is confident Russia will exit the grain corridor deal, which is due for renewal on 18 July.
International canola prices have followed a similar trend, with prices moving higher on drier weather forecasts in Europe and Canada. However, falling Crude Oil prices and lower demand for canola oil used in biofuel production added weight to prices and eroded any gains.
Locally canola prices have improved this month as buyers react to international price increases and bid up to match grower selling targets which have remained above recent price levels.
In other local news, drier conditions have continued in parts of NSW and QLD this month which has seen buyer demand increase and local prices for feed grains trend upwards.
Buyer appetite in the typically export focused states of WA and SA has also increased, as reports suggest many buyers are looking to ship feed grains into Brisbane to substitute short local supply.
A total of 62 different buyer businesses have purchased grain on Clear Grain Exchange this month. By offering grain on CGX, it gives all buyers the ability to purchase or bid on your parcel.
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 often are 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
"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.