Bumper harvest price stress

Grain harvest exceeds expectations in Australia

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Winter crop production in Australia in 2020-21 is expected to be 51.5 million tonnes, second only to the record high of 56.7m/t in 2016-17.

Winter crop production in Australia in 2020-21 is expected to be 51.5 million tonnes, second only to the record high of 56.7m/t in 2016-17.

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Grain prices have come under pressure as Australia's 2020 grain harvest continues to exceed expectations.

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Grain prices have come under pressure as Australia's 2020 grain harvest continues to exceed expectations.

Wheat and barley prices have tumbled by up to $30 a tonne recently as traders baulk at the large volumes being offered by farmers.

Bumper yields across NSW, Victoria and South Australia, coupled with better than expected crops across Western Australia saw ABARES hike its national production estimates.

Winter crop production in Australia in 2020-21 will be 51.5 million tonnes, second only to the record high of 56.7m/t in 2016-17.

ABARES raised its 2020-21 wheat production estimate to 30.2m/t up from 28.9m/t in September, the second highest on record. Barley production is forecast to increase to 12m/t, also the second highest ever. Canola production is forecast at 3.7m/t, the fifth highest on record.

Some believe ABARES December estimates are still underestimating the size of the national crop based on the larger than expected grain deliveries hitting bulk handling systems across the country. Some say the Australian wheat crop could be lifted by another 2 to 4m/t after the harvest dust settles.

Grain deliveries continue to stream in across most states. GrainCorp had received a record large 7.2m/t of deliveries with harvest expected to continue for another two weeks. CBH and Viterra are also reporting better than expected deliveries. Advanced farmer grain is also pressuring grain prices lower as exporters struggle to place the big volumes of wheat and barley coming onto the market.

The combination of bumper yields and good prices has seen many farmers opt to sell wheat, barley and canola rather than storing in the hope of better prices. Exporters are struggling to place the advanced farmer sales as many global buyers step back from additional purchases in expectation of cheaper prices next year.

Australia isn't the only country where wheat crops have exceeded expectations.

Canadian wheat crops have come in better than anticipated, prompting the government forecaster to raise its estimates. Canadian wheat production in 2020 is set to rise 7.7 per cent from last year to 35.2m/t, making it the largest harvest in seven years.

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