THE huge summer crop harvest in North America is finally moving into top gear after a run of weather-induced delays. At the same time, the winter wheat planting program is progressing well, and the delayed Canadian spring wheat harvest campaign is finally in the home stretch.
The US corn harvest is approaching 52 per cent complete, which is ahead of the five year average and well ahead of last season. Almost the entire crop is now mature, so it is just a case of getting a run of good weather and the progress number will jump significantly. The crop is rated 68pc good to excellent but there have been some isolated reports of rain damage such as sprouting, and yield reports are mixed compared to the lofty expectations.
On the soybean front, the US harvest is also about 50pc complete, but contrary to corn, this is running behind both last year and the five-year average. Farmers were quick to get back into the fields to harvest beans once the wet weather subsided, but in some areas the rains and snow have already damaged the unharvested crop. The good to excellent crop rating dropped two points to 66 per cent and yield reports have also been disappointing.
Sorghum harvest is reported at 48pc complete in the US. This compares to 39pc the previous week. US sorghum is Australia's biggest export competitor, particularly into China. The Chinese prefer the Aussie quality, but small crops and relatively high domestic demand has limited Australia’s export sales to the relatively inelastic China alcohol market in recent years. The effects of the east coast drought should ensure that next year will be no different.
The prospects of a large sorghum plant in Australia this season have increased significantly with more rainfall across many parts of Queensland and northern NSW.
According to the latest estimates, the US winter wheat crop is about 80pc planted. This is up 15 percentage points on last week and on par with the five-year average. In Canada, the spring wheat harvest has been delayed due to snow. The Ag Ministry in Manitoba estimated that their spring wheat harvest was 98pc complete but reports from Saskatchewan put their spring wheat harvest at just 75pc complete. This is up week-on-week but is still well behind the same time last year. Not surprisingly, quality issues are surfacing as a result of the snow.
The prospects of a large sorghum plant in Australia this season have increased significantly with more rainfall across many parts of Queensland and northern NSW over the past week. While it is far too early to call an end to the drought, the change in seasonal conditions since the beginning of October is certainly very welcome.
Most of the summer cropping parts of southern Queensland have now had at least 50mm of good soaking rain since the beginning of October. The eastern parts of the Darling Downs have been even more fortunate, with storms early in the month, and again on the weekend, bringing totals to more than 100mm in most regions.
Central Queensland has also been the beneficiary of good precipitation this month. The majority of the sorghum plant in that part of the world generally doesn't happen until late December or January. More rain will be needed between now and then, but these falls are certainly a good start to their wet season.
Rainfall in northern NSW got off to a slower start than Queensland but most of the summer cropping districts have now recorded at least 50mm for the month. This part of Australia has been one of the hardest hit by the drought and the soils were extremely dry leading into the spring. The planting window is still wide open but a lot more rain is required in most districts to fill the profile and get the ball rolling.
Sorghum seeding activity has certainly ramped up in districts where adequate rainfall has been received. This year's plant has the potential to be huge if seed sales are an accurate indication. According to reports, demand for seed has been extraordinary since the first rains in early October. I suspect that the media reports of seed running extremely low have been feeding the buying frenzy.
The volume of seed sales indicates the total plant could be as high as 1 million hectares. That would be a record area if it comes to fruition. However, I believe that there are a number of growers who have purchased seed that still have inadequate moisture and are not guaranteed of getting it planted, especially in NSW.
While a record sorghum plant (if it eventuates) doesn't necessarily mean a record crop, every rain event will increase potential yield and add confidence to production estimates. However, no matter the size of the sorghum crop, the first paddocks are unlikely to be harvested until mid-February. That is still four months away.
In the meantime, the eastern states’ consumer will still rely almost solely on shipments of white grains from Western Australia. A big sorghum harvest will not eliminate that requirement. It will simply slow the west to east grain movements and free up some Western Australia wheat and barley for the export market.
Interestingly, the Philippines bought a 55,000 tonne cargo of Australian feed last week, for January/February shipment. This indicates that Western Australian values are competitive in the export market, effectively putting a floor under east coast cereal values based on full execution from the west.
New crop sorghum values in Queensland and NSW continue to trade at a significant discount to wheat and barley. Sorghum delivered Darling Downs for March/April 2019 is bid around $370. This compares to wheat and barley bids of about $455 and $445 respectively. The size of the plant, crop progress, final yield, quality and ultimate demand will determine movements in that spread until new crop stock is available to the consumer.
– Peter McMeekin is a consultant with Grain Brokers Australia.