Domestic grain prices buck overseas declines

United States grain and oilseed futures ended the week solidly lower in a see-sawing week. Grain and oilseed futures were sold sharply lower as weather forecasts added much-needed rain for struggling corn and soybean crops in the Midwest.

News that the US Federal Reserve may start lifting interest rates earlier than expected as they move to head off inflationary fears was also bearish for commodity markets. The US dollar climbed sharply making global commodities more expensive, putting pressure on global prices, including grains.

Tightening old crop grain supplies across the east coast, aided by a 3 per cent fall in the Australian dollar helped insulate local grain prices from most of the extreme volatility seen offshore.

Southern Queensland old crop grain bids were steady to slightly lower with feedlots seeing the dip in prices as an opportunity to extend coverage. Stockfeed wheat into the Downs slipped $3-4 to $320 delivered while barley was unchanged at $305-308.

Brisbane wheat exports continue at a solid pace and this pattern is expected to continue through the season. More than 800,000 tonnes of wheat have been shipped from Queensland so far in the 2020/21 marketing year and could exceed 1.5 million tonnes before the season is complete.

New crop bids were softer with the weaker tonne in global grain markets and the favourable start to the season across southern Queensland and New South Wales. Steeper declines were seen in the south where buyers wound back prices after good rains across Victoria and South Australia.

It's shaping up as another big Australian grain crop in 2021 with the near-ideal start for south Queensland and New South Wales.

Western Australia has also enjoyed a stellar start to the year and is well-positioned for a record large grain harvest. Larger wheat planting and the perfect start to the growing season has some already talking of a record large WA crop that could match last year's massive NSW harvest.

It's still early days for the 2021 grain harvest as we approach the end of June although the start is extremely promising. Australia's strong export performance in the near-record 2020 harvest has demonstrated the export capacity and the markets required to successfully move big harvests.