Grain Report Wednesday - 18th December
What price do you want for your grain?
Overnight moves in international markets and yesterday's actual traded prices across Australia are below to help you determine your price. If you need to change your offer price, simply edit it before market open.
Grain complex drifted lower as the market can’t see past adequate nearby supplies and prospects for a large south American corn and soybean crop.
But wheat availability is starting to tighten and there are problems with Russia production which has been the dominant influence in markets through 2024.
SoveCon has lowered new crop Russian wheat production estimates to 78.7mt, with crop conditions the worst in decades. This would be the lowest Russian crop since 2021. Profitability in wheat growing in Russia has been poor which may also limit expenditure on crop inputs further restricting yields. The forecaster commented that they don’t think ‘these factors are priced into the market’.
Are funds happy to maintain their large short positions in wheat given issues in the dominant exporter? This market could pop quickly if the funds change their view with the market trading a comfortable supply scenario.
French new crop wheat area is expected to have rebounded 9% after a drier end to August allowed them to finish planting after wet weather hampered seeding last year.
In contrast, Ukraine crops have entered dormancy in reasonable shape. While this may be the case there is a big chunk of north-western Europe where conditions are not ideal and it's patchy through Romania and Bulgaria.
Middle East and North African importers are now turning towards EU suppliers for grain. But yields and quality in western Europe was constrained by wet weather last harvest and milling wheat supplies could be limited. It's doubtful that they will have large supplies of milling wheat left for Asian markets, reducing competition for Australian wheat into Asia. More Australian boats should soon start appearing on the stem increasing competition for milling wheat that is still mostly in growers’ hands.
Global canola values were dragged down by sluggish demand across the veg oil complex which has seen weakness in palm and soy oil markets.
$A slightly lower at 63.4USc
BOM most of the rain looks to be across northern Australia over the next week.
ASX still at $322/t
Cereals were weaker across WA by $2-5/t. In the east, higher protein milling grades were weaker particularly H1 but feed grades a little stronger. Given that downgrading is less than expected demand for higher protein grades for blending has backed off. Sorghum values lifted around $10/t into Brisbane and Newcastle to $315/t and $320/t respectively. Canola was back $5-10/t in line with weaker international values. Need to be patient with milling wheat grades, we probably only need a bit more fundamental support from somewhere to turn market sentiment (maybe an Indian purchase?).
24/25 Best Bids 17/12
Wheat APW1 $381/t Kwinana (-5), $366/t Geelong (n/c).
Feed barley $321/t Kwinana (-3), $313/t Geelong (-2).
Canola EU $875/t (-10) & non-EU $735/t (-5) Kwinana, EU $798/t (-8) & non-EU $676/t Geelong (-6).
Open Market Call
Firm. Canola still under pressure.
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