Darling Downs feed grain markets eased last week as buyers wait for sellers to emerge after torrential weekend rains swept across unharvested grain crops across south eastern Australia.
It was a wet start to summer with upwards of 100mm of rain fell across parts of southern NSW and north-eastern Victoria on Friday and Saturday. The widespread soaking rains created havoc through the southern slopes of NSW and parts of Victoria, with isolated flooding in low-lying areas.
Farmers with unharvested crops are unsure of how the quality will hold up following the inundation, but fear grades will suffer.
Some traders speculated that as much as 4 million tonnes of wheat through southern NSW, Victoria and South Australia remained unharvested when the rain hit. Although it remains unclear, how much of the unharvested crops will be downgraded by the wet weather.
Large areas of the Victorian grain areas dodged the torrential rain, with the Wimmera and Mallee escaping the worst of it.
Northern grain prices were softer ahead of the forecast one in 50 year storms, as buyers readied for a potential influx of downgraded wheat sellers. Stockfeed wheat prices delivered into the Darling Downs finished the week down $3 at $322 while F1 feed barley was unchanged at $318.
Unsettled weather on the weekend also delivered much-needed rainfall for northern sorghum farmers, who were anxious to see some follow-up rainfall for summer crops after a drier than normal November.
Most of the Darling Downs received a general 15mm to 30mm on the weekend with some areas with isolated falls of more than 50mm. The heaviest falls were recorded close to the range with Toowoomba receiving 48mm for the week.
Heavier falls were recorded through northern NSW which will benefit sorghum crops and other summer grains. Moree, North Star and Narrabri recorded a general 30mm to 40mm while most of the Liverpool Plains received more than 50mm for the week.
Sorghum prices fell ahead of the expected northern rainfall. Darling Downs new crop sorghum finished the week down $3 at $260 with similar declines seen in the Brisbane and Newcastle markets.
Medium term weather outlooks for the north are looking promising. Last week the Bureau of Meteorology said there was a good chance cooling Pacific Ocean temperatures would reach La Nina thresholds in the coming week. The Bureau expects any La Nina may be short-lived but said December is likely to be wetter than average through south eastern Australia, extending up into southern Queensland.
United States grain futures ended last week mostly higher, but only after nearby wheat and corn contracts made fresh contract lows earlier in the week. Last week’s modest rise wheat prices was more about investor short covering by funds than any supply concerns.
Local analysts are forecasting that Russia will produce a 76mt wheat crop in the 2018/19 season, based on the near unchanged plantings and average yields. While this is down on last year’s record 83mt harvest, it would be their second largest crop ever which would continue to cap world prices, if realised.