Grain Prices....

[danny W1M]

What happened in wheat today?
cbot + 8 cents
kcbt + 10 cents
Mge + 8 cents

all in $USD of course!

[malleefarmer]

Australian grain production is expected to take a big hit with volatile weather around the country making it harder for farmers to match the record-breaking yields from just twelve months ago.

Farmers are expected to produce 35 million tonnes this year. That might sound like a lot, but it's 41 per cent down on last year's record breaking crop of 59 million tonnes.

A dry winter in Western Australia and severe frost events on the east coast will likely result in the impending harvest to be eight million tonnes shy of the national five-year average.

The mediocre outlook comes from rural lending specialist Rabobank which has released its 2017/18 winter crop production forecast.

Rabobank agricultural analyst Wes Lefroy said as harvest gets underway in the coming days and weeks, there will be some disheartened farmers.

"It's been a disappointing year," he said.

"We were never expecting to match the 59 million tonnes of record production that we had last season but, equally, we would have like to at least reached the five-year average."

Mr Lefroy says the shortfall was almost purely due to poor yields, with a similar area planted in 2017.

"Hectares were down slightly, but not significantly," he said.

"We saw a four per cent fall year on year in planted hectares across the nation and really this is due to cut hectares in Western Australia, purely due to the dry start there."



Tale of two seasons

It was a dry start to the season in Western Australia with many farmers experiencing their lowest winter rainfall on record. Rainfall in recent weeks, however, had made for a soft spring finish and increased yields.

On the east coast, a better start to the season didn't mirror the finish with many farmers experiencing devastating frosts.

"Really the story across the nation has been a tale of two halves," Mr Lefroy said.

"The west had a poor start while in the east, Victoria in particular had a good start, even the Riverina too had a good start, but from then on in the east, it's gone backwards and the conditions have deteriorated.

"Frost has certainly been a factor in New South Wales and northern parts of Victoria where some losses have come in between 80 and 100 per cent."

"There are actually farmers in New South Wales that are looking to now graze out crops in canola and also in cereals."

He said New South Wales was looking at its lowest combined yield in a decade.

"Irrespective of where you were in the state, conditions really went back from [seeding]."

"It's really been those drier conditions and even in some of those areas as I mentioned, the frost has really put the nail in the coffin for that year and actually made more damage to the crop than the dry conditions have."



Prices move higher to reflect low grain supply

The yield losses are across the board with wheat down almost 20 per cent on the five-year average, barley 18 per cent down and canola down five per cent.

But Mr Lefroy said the bright spot was an increase in pulse plantings and as a result, the fall in yield would be just four per cent on the five-year average.

"So really the pulse prices at the moment, chick peas and lentils in the east are really incentivising growers to put more hectares in," he said.

Mr Lefroy said for the other bulk commodities, the decrease in supply was positive news for prices.

"Really driving basis, particularly in wheat has been local supply availability," he said.

"So in north eastern states such as Queensland and also New South Wales, local basis have been really quite strong and prices have remained really quite strong.

"To the point where we've actually seen some inter-state grain movements from South Australia and Victoria head to those states to supply the feed demand up there."

Mr Lefroy said prices started high in Western Australia but had dipped to reflect the boost in yields towards the end of the season.

"Basis was really quite strong heading through June and July but then flattened off in October once the season got better," he said.

"So the outlook for wheat price in particular locally, will depend a lot on that local supply story and how harvest plays out."

[farmaholic]

Saw a Broker's posted feed wheat trades made at $5.20 to $5.30 a bushel.... a local fellow who contracted half his wheat for $7/bu to a terminal at about 14% Px and delivered well under that is being discounted to under six dollars a bushel! Remember I said half his wheat.... he blended to large bins into one sample and is hoping the undelivered bin has enough HIGH protein to increase the average on the delivered stuff. I think he handled it poorly.... two bins, each off different fields? Topography and previous crop might be making a difference in Px values!

Long story to make the point good feed wheat and low Px milling wheat spread sucks.

[Rareearth]

Thanks for the update Mallee

I wonder why the Aus growers would increase Pulse acres with prices dropping and massive stocks on the prairies(canada). When and they will, move into the market place prices will drop further. The Canadian quality is top notch. I would expect pricing in both countries to drop further, and movement slow. The “Russian” entry into pulses might further keep prices low if the big exporters in that country convince the farms to grow large acreage again - only to sell at even lower prices = lower Canadian and Aus prices

[farming101]

Wheat no longer boring, up 49 cents since Oct 31!

[farmaholic]

Wheat no longer boring, up 49 cents since Oct 31!

When I look at the MGEX March daily chart....wow...Last July!!!! We are a long way away from that and wonder how much of that high the market can regain? I don't know if there's any reason for it to try? Px will likely be the driver but I sure.don't like the premium and discount structure....eight cents per tenth discount and only four (cents?)per tenth premium. If px is in such demand and there isn't much around....the schedule is backwards in my opinion. But we all know the answer as to why it is the way it is. AND why are the Cos almost all the same? I guess its up to you to negotiate something better...ha ha ha.

Canola has been working hard since the beginning of Oct but never had the dramatic high spring wht did in July

[farming101]

Jan soybeans went up through 10.065 resistance and now in full retreat

[farming101]

Jan soybeans have fallen to a price that could turn out to be overhead resistance for the next while.

Canola will be following soy complex down tomorrow I would think. There was a big draw on commercial stocks in the week ending Nov 5, but would expect a stock build in the week ending Nov 12.

MW had a poor day but no damage done

[dave4441]

Thanks for the update Mallee

I wonder why the Aus growers would increase Pulse acres with prices dropping and massive stocks on the prairies(canada). When and they will, move into the market place prices will drop further. The Canadian quality is top notch. I would expect pricing in both countries to drop further, and movement slow. The “Russian” entry into pulses might further keep prices low if the big exporters in that country convince the farms to grow large acreage again - only to sell at even lower prices = lower Canadian and Aus prices

Because their days to maturity is way longer then ours with the crop going into partial dormancy and then back to vegetative and reproductive. What i am saying is Australia seeded long before the picture became clear and before the serious oversupply situation within India.

What i don't understand is their production potential this year. Official number is 540,000 MT of lentils. What is the future number as it will either help or hurt long term. They have been dropping their asking prices in last week so would seem lentil crop is in ok shape