Weather worries keep local grain markets on edge

Local grain markets have rallied sharply against the major global benchmarks in recent weeks as torrential east coast rains threaten both the quality and size of the upcoming winter crop harvest.

While it's still widely expected to be a bumper harvest, excessive rain and floods have taken a heavy toll on some areas which has many farmers saying production estimates will fall well short of the early season expectations.

Regional prospects vary considerably ranging from record yields across much of the Central Highlands and southwestern areas to complete crop write-offs in some areas that have been inundated by flood waters.

Buyers continue to chase supplies, which is keeping nearby prices firm. New crop grain values are being driven by the quality uncertainties which has seen milling wheat quality premiums rocket higher.

Weekly storm events continue to limit harvest progress. GrainCorp reported grain delivered of about 350,000 tonnes at the end of October into its Queensland and northern NSW depots before rain stopped harvesting.

Grain harvest has resumed in some areas. Early reports are showing mixed quality including SFW but also some wheat that is making milling quality specifications. Buyers are showing strong interest in milling quality wheat and malting quality barley.

Harvest progress will pick up this week before the forecast next round of storms arrives on the weekend.

Black Sea supply uncertainties are keeping global grain markets volatile. United States wheat futures surged higher early last week on news that Russia would pull out of the safe corridor deal with Ukraine and the United Nations. Global wheat futures have returned most of these gains midweek after Russia backflipped, saying it would rejoin the export deal immediately.

Global wheat markets will remain sensitive to the ongoing Black Sea supply uncertainties through the 2022-23 marketing year.

Wet weather saw Australia's September wheat exports fall to around 1.8 million tonnes, which was the smallest monthly total in 10 months. Despite the smaller than expected September wheat exports, Australia still reached a record large 27.4mt for the 2021-22 marketing year.

Queensland exported around 2.2mt of wheat in the 2021-22 marketing year.