Local grain prices ended the week sharply higher after the USDA slashed its forecast for global wheat production.
New crop ASX east coast wheat futures jumped $17 to $345 a tonne as global markets surged higher on the larger than expected cuts to global wheat output.
Respected grain analysts were expecting the USDA to lower world wheat production estimates in its monthly world supply and demand estimates, but the extent of the reductions came as a surprise.
The single largest reduction was in Russia where 2021-22 wheat production was cut by a whopping 12.5 million tonnes, or 15 per cent, to 72.5mt. Lower winter wheat yields and a series of thawing and refreezing events earlier in the year, referred to as ce crusting, which reduced the harvested area, triggered the large revision in Russia's wheat crop, USDA said.
Canada's wheat production was lowered by 7.5mt to 24mt on worsening drought conditions across the Prairie Provinces during July.
This would be the smallest Canadian wheat crop in more than a decade.
Production increases in Ukraine and Australia partially offset the large reductions in Russia and Canada.
Australian wheat production was lifted by 1.5mt to 30mt with the favourable weather.
Global barley and canola prices are being supported by the smaller Canadian harvest.
It's shaping up as a good season for Australian grain farmers as tightening global grain and oilseed supplies lift prices, coinciding with an expected bumper harvest.
Bumper crops have also been good for storage and trading companies. GrainCorp upgraded its profit estimates to $125-$140 million following last year's record grain intake of 16mt.
Domestic grain demand also remains robust.
Cattle on feed for the April to June 2021 quarter increased to 1,173,652 head, a 168,617 head increase from March, according to the latest results of the ALFA and MLA survey.
Queensland accounted for a large proportion of the increase in cattle numbers on feed, increasing by 166,381 head, or 30.7pc, to 708,557 head.
New South Wales, Victoria and South Australia recorded modest increases in cattle numbers on feed.
Strengthening global markets pushed southern Queensland grain bids sharply higher. New crop stocks feed wheat gained $15 to $325/t delivered into the Darling Downs. New season's barley was up $25 at $295/t.
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