Farmers across eastern Australia are wrapping up what is widely expected to be their largest winter grain harvest ever.
GrainCorp has received 11.5 million tonnes of grain into its storage network through eastern Australia. This represents a 50 per cent increase over last year’s deliveries and is the largest since 2010/11.
GrainCorp said it received 1.6 million tonnes of grain through the Christmas and New Year period, with the vast majority of this in Victoria and NSW.
Grain harvesting is complete in Queensland with just a trickle of grain deliveries being made into over the past two weeks. GrainCorp said it hadreceived 1.78 million tonnes of grain into its Queensland network in the 2016 harvest, up from around 1.2 million tonnes a year ago.
Harvest is rapidly drawing to a close in NSW and Victoria.
About 600,000 tonnes of grain was delivered into GrainCorp’s NSW grain network through the Christmas and New Year window, with close to 1 million tonnes received in Victoria.
Total grain deliveries into GrainCorp’s Victorian network of 3.2 million tonnes are nearly three times larger than last season’s disappointing crop. NSW grain deliveries are up by more than a third on last year, according to the harvest reports.
Rain slowed grain harvesting through southern NSW and Victoria during the Christmas and New Year period. Scattered storms tormented farmers in the final stages of the harvest, stalling headers and threatening the quality of the remaining crop.
Bulk handlers deployed falling number machines through the Victorian north east, where farmers are finalising the last of the harvest. Thankfully, the vast majority of the crop was already in the bin.
With harvest now mostly complete, farmers are assessing the marketing options for the massive crop. Some farmers have already sold part of their crop during harvest but the bulk of the cereals are yet to be sold.
Record large Australian and world wheat crops in 2016 are expected to keep grain prices under pressure well into 2017.
Global wheat prices have been steadily edging lower since 2012 on the back of four consecutive record large world wheat harvests. Over this four-year period global wheat stocks have swelled to record levels, pressuring United States wheat futures to the lowest level in a decade.
Australian wheat prices have tumbled around $50 to $60 a tonne in the past 12 months with the lower international prices.
Australia’s ASX wheat futures have traded in a $210 to $230 for the APW quality through the harvest window. A significant proportion of the Australian crop is expected to be ASW quality because of the soft finish. Cash markets for ASW quality have been reflecting a $15 to $20 discount to APW.
Eastern Australian wheat prices are now seen has competitive into Asian and some Middle Eastern markets for the first time for a few years. Shipping stems for Newcastle, Port Kembla and Geelong are now reflecting this increased activity for January and February.
For the most part, farmers have remained reluctant sellers at the current low prices. Farmers were content in trucking grain into the local storage or securing in on farm storage while waiting for the New Year to assess the best marketing options for the massive crop.
