An Australian Take On The Grain Market
21/02/12 -- Be honest, it's not every day that you read a grain market report that includes the expression "and we’ve all got poo on our socks" is it?
Well, we're obviously not reading enough reports from Down Under, where PentAG Nidera say that this is exactly how the Australian grain market feels right now.
Intrigued? I though so: And these were clean on this morning as well
Dust Anybody?
07/02/11 -- The Ozzies must be wondering what's coming next, Nazi Killer Zombies? They've had drought in the west, floods in the east, Cyclone Yasi and this little rascal which "carried a lot of topsoil from north to south for about 300 km" in Western Australia, according to my chum Down Under, Bill Crabtree, who sent me this picture. You won't spot the ashes in this picture though Bill, they live over here these days.
Here's A Thought
28/01/11 -- Our chums at the excellent Agrimoney.com carry an interesting story today suggesting that before the combines have stopped rolling and the mops & buckets have been put away, Australian farmers are already thinking about next season.
They may not be very good at winning the Ashes back, but even they can spot a golden opportunity when one presents itself. Unsurprisingly, they fancy planting a bit more wheat next time round, 10% more in the east of the country in fact.
Heavy rains may have cut quality this season but they've also boosted yields, and maybe more importantly replenished the water table rather significantly.
Now you have to remember that this season's say 25 MMT crop, comes despite a harvest disaster in Western Australia, which usually chips in with 35-40% of the total wheat crop Down Under. If they'd have managed a "normal" crop in WA this season then we'd be looking at a total Australian wheat crop of around 30 MMT this time round. And now they're planning on planting 10% more for next season.
And let's face it, the Australian's aren't going to be the only ones looking at the current wheat prices and having these kind of thoughts are they?
Go figure, as they say.
Australian Harvest Latest
20/12/10 -- I'm indebted to my friend Gail Martell at Martell Crop Projections for emailing me these images courtesy of the Western Australia Grains Group (WAGG) of the ongoing harvest situation Down Under. It doesn't exactly look what you would call plain sailing. Blimey!
Western Australian Crops Keep Shrinking
19/11/10 -- A report just out from the Grain Industry Association Of Western Australia paints a bleak picture for the 2010/11 harvest in the state.
They peg the wheat crop at just 3.58 MMT, down 9% from last month's estimate of 3.93 MMT, down more than 56% on last season's 8.25 MMT and the lowest output in more than forty years.
Barley production this year is seen at just 1.33 MMT, down 6% from last month's 1.42 MMT and 39% down on last year's crop of 2.19 MMT.
Rapeseed production is now forecast at 698,000 MT, down nearly 10% from last month's figure of 773,000 MT and 28% lower than last year.
The revisions, on the back of a devastating drought, are in sharp contrast to conditions further east where growers in South Australia, NSW and Victoria are expecting their best crops in years.
Australian Rapeseed Outlook
16/11/10 -- Similar to the outlook for Australian wheat production this season, rapeseed crops in the east are getting bigger and those in Western Australia state are shrinking.
The Australian Oilseeds Federation says that the national crop will be around 150,000 MT up on last season at 2.045 MMT.
Crops in NSW are doing well after an "extremely favourable season" with production in the state increased from an estimated 605,000 MT in October to 650,000 MT this month.
Yields in NSW are seen "well above average" with oil content also higher than normal.
The crop in WA however has been downgraded from an estimated 675,000 MT last month to 590,000 MT this month.
Production in Victoria is seen unchanged from October at 455,000 MT, whilst Southern Australia's crop has been upgraded slightly to 350,000 MT.
Continued rain in the east is causing some harvesting delays in NSW and Victoria, they added.
Australia Latest
15/11/10 -- Persistent rains in the east are hampering early harvest efforts Down Under, although production is seen rising, the weather is causing serious quality concerns.
Premiums for high protein Australian Prime Hard (APH) wheat have reportedly reached fifteen year highs over Australia Prime White (APW) wheat.
According to Australian Crop Forecasters (ACF) the nation will have it's second largest wheat crop on record, increasing it's production forecast to 25.5 MMT from an October estimate of 23.9 MMT.
Although output in parched Western Australia state is seen at only 3.5 MMT, from an October estimate of 4.1 MMT and less than half of the 8.2 MMT reaped last season, production elsewhere will be bumper, they say.
New South Wales is expected to harvest a record wheat crop of 11 MMT, up from an October estimate of 10 MMT, and more than double last season's crop of 5.1 MMT, they add.
Australia's record wheat crop was the 26.1 MMT reaped in 2003/04.
Record Crops In South Australia
05/11/10 -- We keep reading about it being too dry in the West and too wet in the East, so I guess it should come as no huge surprise to hear that things are just corker in that bit in the middle.
South Australia they imaginatively call it, the state where the locals are affectionately known as crow eaters. They'll probably be as cross as a frog in a sock reading this, if any of them could read that is, but I am reliably informed that they can't so we'll press on.
Wheat growers in the state will be tempted to hit the turps on the back of a bin-busting 5.4 MMT crop this season, up 35% on last year and almost double the state's five year average of 2.76 MMT.
"Timely rainfall during September and October, together with ongoing cool to mild temperatures, enabled crops to grow in near ideal conditions. Crops are generally in excellent condition and continue to ripen relatively slowly in the absence of any sustained hot weather, with harvesting to start later than normal and extend over a long period." says the state's November Crop and Pasture Report. Bonzer!
Australia Latest
08/10/10 -- Drought in Western Australia is seen cutting the state's percentage of the national wheat crop from a "normal" share of around 35-40% to less than 20% this season.
Rabobank say that this year's Australian wheat crop will total 22-23 MMT, that's 2-3 MMT lower than some other recent estimates, although still an increase on last season.
If it wasn't for the drought in WA - where they peg output at "around 4 MMT" - then we'd have been looking at a potentially record national crop of 26-27 MMT this year.
Wheat production is NSW is seen at a record 8.7 MMT, say Rabobank. That's an increase of over 70% on last season.
NAB Upgrades Ozzie Wheat Crop
The National Australia Bank have upped their 2010 wheat crop estimate for the nation to 23.8 MMT. That's up from 23.1 MMT a week ago and 22.4 MMT a month ago.
Although still falling some way below ABARE's recent 25.1 MMT estimate, it indicates that crop potential is clearly moving in the right direction despite drought in Western Australia.
They went on to say that ABARE's estimate "certainly is possible" but it is "too early to call" a crop of that size, which would be within a whisker of Australia's all-time record wheat output.
Australia: NSW Wheat Crop Up 75 Percent
NSW Industry and Investment say that "prospects for all winter crops are excellent following average to above average rainfall in the July-August period."
They estimate wheat production in the state at 8.95 MMT, up 75% on last season's 5.1 MMT, and more than a million tonnes above their previous estimate.
Barley production this year will come in at 2.3 MMT, with canola output at just under 650,000 MT, where they say yield potential is "the highest in at least a decade."
Australian Wheat Crop Near Record - Abare
The Australian Bureau of Agricultural and Resource Economics, or Abare, say that the nation's 2010/11 wheat crop will hit 25.1 MMT this season.
That's more than 3 MMT higher than they last predicted back in June and within a gnat's chuff of the all-time record of 25.2 MMT. It's also 2 MMT higher than the USDA said on Friday.
It's all down to bumper production in the east, with output in NSW seen at a record 9.9 MMT, whilst production in Victoria will come in at a 27-year high of 3.4 MMT, they say.
Wheat exports will leap to 18.4 MMT, their highest since 1996/97 and 2.4 MMT above the USDA's latest estimate, they add.
Although there are inevitably downside risks to final production, there is also the potential for final output to come in even higher, they enthused.
Australia Wheat Latest
It might be too dry in the west, but farmers in New South Wales are looking forward to a bumper 2010/11 wheat crop of 7.8 MMT, a 53% increase on last season, according to NSW Primary Industries Minister, Steve Whan.
As well as 2.95 million hectares of wheat the state has also planted 316,500 ha of canola, 782,000 ha of barley and 337,000 ha of chickpeas. Combined that should bring in a a record AUD2.8 billion winter crop this year, he says.
“That’s more than double the annual average of the last drought-stricken decade," according to Whan, who says the winter crop harvest will start in mid to late October in the north of the state and finish in the south in December.
Australia Latest
It remains a game of two halves Down Under with conditions very dry in Western Australia state, where almost 40% of the nation's wheat is grown. In contrast if anything they've had too much rain in parts of the east, with some farmers reporting that they've had to take to the air to carry out top dressing.
WA's Grains Industry Association says that this year's wheat crop in the state will only manage to come in at 5.5 MMT, down from 8.25 MMT in 2009, and that is given "normal" rainfall for the next couple of month. The Australian Bureau of Meteorology unhelpfully stay firmly on the fence, saying that the chances of that are 50:50.
In NSW they have what one agronomist describes as "the best cropping outlook since 2003/04." March rainfall helped get winter crops into the ground in a timely manner and aided early germination, and although May was mostly dry late May and June rains have generally got the crops in much of the central and southern region looking "the best experienced for several decades," according to NSW Industry and Investment.
South Australia 2010 Winter Crop Production Seen Down 19 Percent
According to South Australia state's Department of Primary Industries and Resources the area given over to winter crop production will fall across the board in the state this season.
Overall winter crop production will fall 19% this year to 6.34 MMT, they say.
Of that, wheat production in the state will fall 13% to 3.5 MMT, whilst barley output will decline even more sharply - down by almost a third to 1.7 MMT. Canola production will also decline, down 10% to 267,300MT, they say.
Drier conditions for the first three weeks of May delayed seeding in many areas, although good falls in late May allowed seeding to resume, with most farmers finished by mid-late June, they add.
Growing season rainfall to date (April-June) is near average throughout most districts, they conclude.
Full report here
Australian Canola Latest
This year's Australian canola crop will be the largest since 1999/2000 at 2.215 MMT, according to the Australian Oilseeds Federation. Good rains in Victoria, NSW and South Australia are behind the increase, along with higher plantings in Victoria and NSW, they say.
West Australian canola production is forecast down to 1.03 MMT from 1.18 MMT last month on lingering dryness, they add.
Output in Victoria is forecast at 415,000 MT, NSW 480,000 MT and Southern Australia at 290,000 MT.
"Victoria had a very strong start to the season, following the summer rain and the continued lower wheat prices have driven a further increase in the area," they said.
Their forecast is more than 250,000 MT higher than ABARE's current estimate of 1.96 MMT.
Australian Crop Estimates
ABARE have tweaked their 2010/11 Australian crop production estimates slightly overnight. They now peg this season's wheat crop at 22.1 MMT, up 200,000 on their previous estimate and 400,000 MT higher than output last year.
They've reduced their barley production estimate by 700,000 MT from last time to 7.3 MMT, a significant 12% decrease on 2009.
Rapeseed production will total 1.96 MMT this year, they say. That's only marginally higher than last season and probably a bit on the low side. The Australian Oilseeds Federation yesterday pegged the crop at 2.2 MMT.
Overall early crop conditions look good in the east. "Rainfall between March and May was the most widespread above-average rainfall to be recorded over the eastern states since 2003," ABARE said. Although they did note the potential for locust damage later in the season.
Western Australia continues to have dryness in many areas, and rainfall in the coming months will be "crucial" here, they noted.
Australia: NSW Plantings Latest
Industry & Investment NSW report mixed planting conditions in the state where "some districts have been able to capitalise on the good seedbed and full subsoil moisture profiles to almost complete winter crop plantings" yet other districts have almost no crops planted at all.
"Most areas are now in need of good rainfall to consolidate crops that have been sown, and enable the remaining crop to be sown," they say.
They forecast wheat plantings of of 2.91 M ha, 6% below the 3.10 M ha forecast at the same time last year. An estimated 1.63 M ha, or 56%, has been planted so far they say.
Current estimates have 36% of the north sown, 69% of the potential area sown in the centre and 54% in the south. Widespread rains (25-50 mm) are needed in the north east and south west to allow planting to recommence, they add.
Barley sowing predictions of 755,200 ha are similar to earlier forecasts, with around 47% planted so far. In the north only around 19% is sown, reflecting the dry conditions, 63% in the centre and 45% in the south, they estimate.
"The area estimated to be sown to canola is 304,050 ha, up 12,200 ha on the April forecast. About 91% of the crop has been sown, with the remaining area to be sown in the next two weeks," they conclude.
Australian Farmers To Plant Less Wheat, More Rapeseed
Australian farmers in NSW will plant less wheat and more rapeseed for the 2010/11 harvest, according to the NSW Department of Primary Industries.
They say that winter wheat sowings in the state will decline 8% to 2.84 million ha, with rapeseed plantings climbing 26% to almost 292,000 ha.
"The low price for wheat is contributing to grower intentions to stick with canola despite its higher growing costs. Prospects have increased in the north but further rainfall on already saturated paddocks around Coonamble and Walgett may impact intended sowings. Most areas in the centre and south have good subsoil moisture, with sowing to commence on the next rain. Some canola has already been sown on the upper slopes as a dual-purpose crop," they say.
"With reasonable subsoil moisture levels across most of the state, (wheat) growers will be looking for a sowing rain of 25-50 mm from mid April to allow widespread plantings to commence," they add.
For now, barley planting in the state will remain flat at around 725,000 ha, they say. Although "If sowing rains don’t arrive until late May, sowings could increase across the state, especially in western areas," they predict.
With the price outlook for wheat pretty dismal, farmers are looking for alternative cropping options, as well as increasing rapeseed plantings, chickpea sowings are seen 41% higher this year to an all-time high of 337,420 ha.
The situation in NSW is expected to be replicated on a national level, that doesn't necessarily mean lower wheat production though. Summer rains have been pretty good in general, and farmers are well advanced with their winter sowing plans.
Although much depends on winter rainfall, early sowing won't do any harm in giving the crop a fighting chance of making a decent yield. Rabobank recently raised their 2010/11 wheat production estimate from 20 MMT to 21.8 MMT. Abare are currently predicting a crop of 21.94 MMT, despite a drop in acreage, with the National Bank of Australia coming in even higher at 22.6 MMT.
Old Dog, New Tricks Etc
Winter wheat planting is about to get underway in Australia, and early suggestions that planted area might be significantly reduced this season are faltering.
Rabobank recently raised it's 2010/11 wheat production estimate from 20 MMT to 21.8 MMT, falling in line with earlier estimates from ABARE (21.94 MMT) and the National Australia Bank (22.6 MMT).
Australian farmers even more disgruntled with domestic wheat prices that their European or US counterparts, largely thanks to interest rates at 4.25% and the resulting strong Australian dollar.
That has depressed local prices even more than those elsewhere in the world.
Even so, ideas that farmers there would subsequently cut their wheat area seem to be unlikely, judging on comments from the famous Ron Greentree, the county's largest farmer:
"You can't stop," Mr Greentree said. "We are in the business of growing grain and I think a lot of people will be hoping that by the time we harvest, prices have risen."
You might be better off pining your hopes on getting the Ashes back Ron.
Sound familiar?
