Rain good but commodities take a hit

Timely rain, with more to follow next week, boosts forecasts for higher yields.

Rain gauge: Growers welcomed the long-awaited rain, following a dry July, to boost production prospects.

A WIDESPREAD soaking over much of Australia’s wheat belt has been welcomed by growers following a dry July, but prices for all commodities are taking a hit.

Last week’s forecasts did not disappoint Victorian growers, but rain totals were a little less than expected in those in northern NSW and Western Australia.

Global analysts are watching this timely rain and higher yield estimates are now expected, particularly with more follow-up falls expected next week. There appears to be an increasing frequency of it across Australia.

This rainfall news, combined with further positive news for grain supplies in the northern hemisphere, has pushed down grain prices in the US and Australia.

On the Chicago exchange corn futures opened this week $3.40 a tonne lower while wheat futures are down $18.60 a tonne.

As the Russian harvest moves north, crop yields are increasing.

While analysts had been estimating Russian wheat production might fall to 75 million tonnes, they are now tipping it could approach 80 million tonnes.

Favourable crop reports are also emerging for corn in the US, and wheat in Canada and the Black Sea region.

Those factors have pressured grain prices in central Europe with wheat futures on the Paris exchange falling $5.30 a tonne.

The wheat price impacts in the Port Adelaide, Victorian and Port Kembla port zones have been substantial with a $13 a tonne fall in the ASX futures and $15 a tonne fall in cash markets.

According to traders, growers have not been aggressively selling new crop grains, but exporters are reluctant to take on long positions.

Barley prices have taken a hit as well with current crop prices for BAR1 barley back $17 a tonne to $255 a tonne delivered to Melbourne users and new crop BAR1 back $10 to $218 delivered to Victorian ports less freight and GST.

Favourable production prospects are pushing down canola and pulse prices as well.

In the past three weeks, new crop faba beans have tumbled $45 to $425 a tonne delivered to Melbourne grain packers.

The earlier maturing faba bean crops of northern NSW and southern Queensland are often considered a cheaper source compared to southern Australia.

For December delivery nugget lentils are down $25 to $535 a tonne and desi type chickpeas are $55 lower at $510 a tonne.

Oilseed prices are also softer this week.

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