Grain prices through southern Queensland eased as values through south eastern Australian fell on an improving production outlook and weaker international influences.
United States wheat futures tumbled after the USDA delivered a very bearish August world supply and demand estimate report late last week. The report bearish from both a United States and global wheat perspective.
US wheat slid lower after the USDA forecast for the spring wheat came in well above market expectations. CBOT wheat futures were sold sharply lower as the market slashed the premiums for the high protein wheat on larger than expected supplies. Benchmark CBOT wheat futures have fallen by 25 per cent since the highs of early July.
Changes to the global wheat outlook were also negative with massive increases in the size of the Black Sea crops.
The USDA surprised analysts by lifting its forecast of Russia’s 2017 wheat crop by 5.5million tonnes to a record large 77.5m t. If realised, this would be 5m t larger than the previous largest wheat harvest last season. Ukraine’s wheat crop was also raised by 2.5m t to 26.5m t and Kazakhstan’s harvest was increased by 1m t.
Black Sea winter wheat production estimates were raised on higher than expected yields in the harvest results to date, the USDA said. The Russian winter wheat harvest is about a third complete while Ukraine is wrapping up. Spring wheat conditions across Russia and Kazakhstan also remain favourable, the USDA said.
Total Black Sea wheat production for the 2017/18 season was raised by 9m t to a record large 118m t.
Despite reductions to wheat output in the United States, Canada and the European Union, global wheat production was increased by 5.4m t from last month to 743m t, due to the hike in Black Sea wheat production.
Australia’s wheat production forecast was left at 23.5m t, which is at the upper end expectations amongst local traders.
USDA raised its forecast for global wheat ending stocks by 4.1m t to 264.7m t, which is a new record.
Queensland grain buyers, who are still focused on shrinking crops in the western Darling Downs and northern NSW, saw last week’s sharp decline in world values as a buying opportunity. New Season’s stock feed wheat bids into the Darling Downs slipped by $5 to $325 delivered. Feed barley lost $7 to $310 delivered into the Darling Downs.
Sharper declines were seen in southern markets where buyers are looking at the widening gap between local prices and overseas export competitors. New season’s APW multi grade prices for Geelong and Port Adelaide declined by $7 to $12 a tonne to $250 to $260 a tonne port.
Recent rain through Victoria and South Australia has improved crop conditions but farmers will be looking for kind spring to finish.
Strong northern grain prices will attract big sorghum plantings in the coming weeks, weather permitting. Sorghum prices have jumped by around $30 a tonne since June and has farmers readying for a big planting.
New season’s sorghum prices are reflecting around $300 a tonne into the Darling Downs and $310.
