Soaring grain prices are no longer confined to southern Queensland. Old and new season’s grain prices moved sharply higher last week across all port zones as the ongoing dry weather threatens Australia’s 2017 winter crop yields.
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Australian grain bids by $10 to $15 a tonne last week as the sharp rally in Darling Downs grain values seen in late May and early June spread across all states. Gains were mirrored in the new crop markets, as buyers become increasingly nervous about the prospects of next season’s harvest.
Stockfeed wheat prices into the Darling Downs were $10 higher last week at $275 delivered, while feed barley was up by $11 at $258. New season’s bids into Brisbane have been lagging the gains seen in the Downs market, but the gap is starting to narrow. APW multi-grade bids into Brisbane jumped by $14 to $275.
Strong gains were seen across all Australian port zones. New season wheat into Newcastle was $24 higher at $274 port as buyers reflected to deteriorating crop conditions throughout much of the states north west. Price increases were more tempered through south eastern Australia, where most farmers have enjoyed a more favourable start to the growing season.
New crop APW prices into Port Kembla were $11 higher last week at $246, Geelong was $14 higher at $240 and Port Adelaide gained $10 a tonne to $230 port.
Western Australia prices were $7 to $10 higher last week, where dry weather has forecasters trimming crop prospects.
The latest crop report from the Grain Industry Association of WA (GIWA), lowered its wheat planting estimates with farmers in the northern cropping not being able to seed all the intended crop due to the dry weather.
GIWA said the most Western Australia’s northern cropping areas have recorded less than 20 per cent of their normal rainfall from April through to the first week in June, and crops are suffering. They said most of the canola establishment was very patchy and growers are considering fallowing these paddocks without June rain.
US grain futures moved sharply higher last week as crops battle worsening drought conditions across the Northern Plains. Benchmark wheat futures climbed by 4 to 5 per cent as commodity markets entered ‘weather market’ status last week.
Drought in the Dakotas and hot, dry weather forecasts for the Midwest drove nearly all grains markets higher. Deteriorating crop conditions in the U.S. Northern Plains where the spring wheat is grown is expected to keep Queensland APH values were supported. Lower than normal protein levels in the U.S. Hard Red Winter wheat harvest in the Southern Plains is also supportive of the APH values.
The USDA released its June world supply and demand estimates report last week, but without many surprises. New crop world ending stocks were raised 3 million tonnes to a new record 261 million tonnes. USDA raised its forecast for Russia’s 2017/18 wheat crop by 2 million tonnes to 69 million tonnes but left exports unchanged at 29 million tonnes.
