The strongest El Nino in 20 years has officially ended and we are heading into a wetter than normal winter, according to Australia’s Bureau of Meteorology.
Cooling ocean temperatures in the mid-Pacific marked the end of the 2015-16 El Nino event, an event that has wreaked havoc over most of Queensland and particularly through the pastoral areas. The end of the El Nino is welcome news for Queensland grain farmers, as is the prospect of a La Nina developing towards the end of the year.
The Bureau said that a majority of world weather agencies now expect a La Nina to develop during the Australian winter.
Most of mainland Australia, including southern and central Queensland, is expected to see above average winter rainfall as a result of the changing weather patterns, according to the Bureau.
Recent weather patterns appear to show conditions have already changed through Western Australia and south eastern Australia, but northern NSW and Queensland have found it more difficult to shake the dry weather.
However signs are improving that the wetter conditions are starting to push further north. There was a general 5mm to 10mm across southern Queensland late last week and another front is forecast to deliver soaking rain later this week.
Farmers have been increasing the amount of dry planting in the last week as they turn more optimistic towards the seasonal outlook. Upwards of 40 per cent of the crop is planted and out of the ground but in desperate need of rain.
Grain prices across eastern Australia were generally firmer last week helped by stronger US futures markets, slow farmer selling and signs of improved exporter demand.
Darling Downs feed wheat markets ended the week $6 higher at $286 delivered while F1 feed barley was down $2 at $263. Sorghum bids into the Downs markets gained $6 to $241.
There are signs that export demand for grain from eastern Australia is gradually improving. India is reported to have bought around half a million tonnes of wheat for shipment in the coming months after drought cut the size of their domestic harvest, which is expected to be shipped from Australia and France.
A sharp increase in the wheat prices in southern NSW last week, suggests that some of this export demand might be starting to emerge. Port Kembla APW prices jumped by around $20 last week to $272 port.
South Australian barley prices have also kicked in the past month on the back of sales to China.
Brisbane sorghum prices have also licked by 10 per cent in the past month on the back of exporter short covering.
US wheat futures rallied by three per cent last week, helped by strength in corn and soybean markets, despite global wheat markets remaining comfortably supplied.
Early indications from the United States suggests farmers in the Hard Red Winter wheat states will harvest bumper crops. Harvest will pick up in the coming weeks but initial yields have been excellent.
Private forecasters continue to edge estimates of the EU and Black Sea wheat crops higher last week. EU wheat production estimates are now only marginally smaller than last year’s record large harvest while most are now saying the Russian harvest will top last year’s crop.