Grain Report Monday - 12th December
Our goal is to help growers and their agents determine the selling price for their grain by providing relevant price discovery each day. Check out the moves in overnight international markets and yesterday's actual traded prices across Australia. There's also market commentary giving context and comparisons to prices of international physical markets. If you need to change your offer price, simply edit it before market open.
What price do you want for your grain?
WASDE matter you, Oy,
Gotta no respect, Oy,
It’s not so bad,
It’s a nice’a place,
Shut uppa ya face.
As you can tell from my tone-deaf harmony, the USDA WASDE (World Agriculture Supply and Demand “guess”) was released Friday night.
The overall mood in the room was Ho, hum, however there were some interesting numbers selected from the world spinning wheel.
Wheat:
World ending stocks down 500,000 mt to 267.33 million tonnes. Yawn.
World production down 2 million tonnes to 780.59 million tonnes….now you have my attention.
Aussie crop raised 2 million mt in one with ABARE in there at 36.6 million mt and exports upped by 1.5 million tonnes to 27.50 million mt? Did we build another export terminal somewhere or decide to become more efficient?
The Russian crop was unchanged at 91 million tonnes, when everyone in the world, including my neighbour who is a plumber, is calling it 100+ million tonnes?
On the flip side, they decreased the Argie crop by 3 million tonnes to 12.5, which my neighbour also said is closer to 10 million tonnes.
Argie exports will fall by 10 million tonnes this year to 6-7 million tonnes.
Corn (excluding China Supply & Demand):
The corn report was slightly bullish with ending stocks off 2 million tonnes to 92 million tonnes.
Production is down 7 million tonnes to 888 million tonnes, bingo.
The big change was a drop in consumption of 5 million tonnes to 876 million tonnes.
It's interesting to note, the world excluding China, produces 888 million tonnes and consumes 876 million tonnes, which leaves not much room for error.
This is why Corn is a wheat price driver. If corn is tight and prices higher, wheat gets fed to chickens in Asia, displacing corn. This increases wheat demand and pushes prices up.
So, what does all this mean guru, sitting behind a keyboard, I hear you ask.
World prices are supported, and with a tighter corn balance sheet and tighter wheat stocks held by exporters, a production issue will see markets strengthen significantly.
But, for wheat, we won’t know this until the northern hemisphere crop comes out of dormancy (Feb – March).
In other news, ASX Jan 23 wheat was up another $7 last Friday. That’s UP $13 in 2 days.
The delivered markets have also firmed.
Are growers starting to take control of their prices, setting higher sell prices in line with world values?
The market wants your grain, don’t give it away.
Most importantly we're always here to help!
Please give us a call or email if you have any questions.
Call 1800 000 410 or Email support@cgx.com.au
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