New crop confidence buoys futures, pressures old grain prices

Season well on track for average to above yields with further rain across the grain belts of NSW, Victoria, South Australia and Western Australia.

Going strong: Wheat futures markets are regaining ground with persistent reports of Chinese buying more wheat than anticipated.

REGULAR  rainfall and declining demand are pressuring old crop grain prices, pulling them back closer to new crop levels.

December delivery wheat prices opened the week higher with traders bidding the equivalent of $280 a tonne delivered port for the Melbourne, Geelong zones and Port Kembla zones and $277 a tonne for the Portland zone.

These prices are generally $5 a tonne stronger on last week’s rates yet $5.50 shy of the $10.50 a tonne corresponding rise on Chicago wheat futures.

Futures markets in the UK, France and the US were buoyed by news of wind damage lowering the potential yields for US wheat.

Persistent reports of Chinese buying more wheat than anticipated in these markets and lowering production estimates for wheat in Argentina and Europe also supported wheat futures.

This price supportive news was countered with more rain across the majority of the grain belts of NSW, Victoria, South Australia and Western Australia.

After the dry July, the season is well on track for average to above yields with month to date falls of 36mm at Charlton, 42 at Ouyen, 43 at Colac, 47 at Nhill, 50 at Hopetoun and 53 at Deniliquin.

The growing season in NSW is very positive.

The six-monthly rainfall to the end of July was well above average at decile 10 for the majority of the state.

The early break and confidence in yields has seen NSW growers selling new crop grain before harvest.

Australian Standard White wheat delivered to Melbourne end users is back $23 to $307 a tonne and barley is back $12 to $237 a tonne.

A shortage of oats is bucking this trend with milling oats lifting $20 to the Melbourne equivalent of $425 a tonne and feed oats up $60 to $325 a tonne. Many oat sellers have been looking to sell into the seed market at prices over $700 a tonne.

Since the start of March new crop wheat prices have eroded 10 per cent and barley 15 per cent, but at $595 a tonne delivered port, canola values have seen little change.

Canola growers are aware of the added threat of fungal attack this season. Upper canopy blackleg on flowering crops of early sown canola during the cold months of July and early August has the potential to trim yields by cutting nutrient flow to developing seeds.

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