Southern Queensland grain prices continue to rally in a mix of ongoing dry weather worries in Australia and problems with too much rain in the United States.
Australian domestic grain prices moved sharply higher in the past week as buyers start to panic about the absence of planting rain in parts of Queensland, New South Wales and Western Australia.
New season's east coast wheat futures jumped $12 to $350 a tonne. Sharper increases were seen in the Darling Downs where nearby SFW rallied by $25 to $415 delivered. New crop SFW for January was $30 higher at $400.
Darling Downs feed barley prices were also sharply higher.
Other port zones also pushed sharply higher in the past week. Trader bids in Kwinana Western Australia rocketed $40 higher to $325, which matches the new crop bid.
The hike in grain prices across Australia in recent weeks is a function of the ongoing dry weather, which has triggered buying in both the old crop and new crop markets. The dry weather remains a major concern for many farmers, where large areas of southern Queensland and northern New South Wales are looking at another season without a winter crop.
Weather forecasts for eastern Australia remain dry but West Australian farmers are eyeing off potential planting rains later this week. Much of WA's cropping belt recorded one of its driest Mays on record but forecast rain later this week may offer a late opportunity to plant cereal crops.
ABARES is due to release its first detailed forecast for next week, which is broadly expected to see a recovery in grain production from last year's east coast drought.
Global grain inputs continued to support local grain prices. United States wheat and corn futures continued to soar as excessive wet weather threatens to cut corn plantings and adversely impact wheat yields and quality. US wheat futures have rocketed up by 20-25 per cent in the past four weeks while corn prices are up by 15pc as wet weather becomes a negative on crops, with investors now factoring in smaller than expected crops.
Unites States aside, the Black Sea and Europe are looking at a return to large export supplies of wheat in the 2019 season. The International Grains Council, last week, forecast the European Union wheat production at 148.9 million tonnes, 8pc up on last year. Russia's 2019 wheat crop was forecast at 79.5 million tonnes, 7.8 million tonnes higher than last year.
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