Weaker Australian dollar supports prices

The Australian dollar has fallen by near two cents in the past week, or more than 2.3 per cent, which in theory makes Australian grain exports more competitive into overseas markets.

Traders are showing an increased willingness to soak up old crop supplies on expectations of another large export season in 2021/22.

Old crop grain prices into the Darling Downs strengthened by $3-5 a tonne last week. Stock feed wheat was $3 higher at $326 delivered into the Downs while feed barley was up $5 at $310.

Recent wet weather in the north is adding to the upward pressure in the old crop prices. Grain movements have slowed as farmers struggle to access on-farm supplies. Patchy rains resulted in falls of 10 millimetres to more than 40mm in southern Queensland and northern New South Wales in the past week.

Old crop wheat and barley also firmed in south eastern Australia last week on slow farmer sales.

New crop prices drifted lower last week as buyers become more comfortable with the season and the production outlook. December forward stock feed wheat fell $5 to $300 delivered into the Downs while barley was unchanged at $280.

Canola prices surged higher last week as drought and scorching temperatures threaten the size of Canada's harvest.

New crop canola surged $60 a tonne to $780 Geelong and Port Kembla as Canadian canola futures rocketed higher as the crop outlook deteriorates.

Cropping regions across parts of the Canadian Prairies climbed into the mid-40s Celsius last week, hammering canola crops. Crop conditions have plummeted over the past week with drought offering no relief to the record high temperatures. The unprecedented heat is even hot by Australian standards.

USDA is currently forecasting that Canada will produce 20.5 million tonnes of canola in 2021, but this is now seen has optimistic.

While hot, dry weather threatens crops in some parts of North America, a favourable finish for winter crops in Europe and the Black Sea is putting pressure on global wheat prices.

Black Sea wheat prices drifted lower last week as harvest kicks off in southern Russia.

Early wheat yields are coming in well and this pattern is expected to continue in the other winter wheat and barley areas of Russia and Ukraine.