Wetter spring lifts yield expectations in cropping regions
Forecasts of rain this month predict a wetter spring for northern cropping regions raising yield expectations.
OPTIMISM is building for crops in Australia and overseas.
Most cropping areas of Victoria have received at least 25mm of rain this month and weather modelling suggests the chances of a wetter spring are increasing for northern Victoria and areas to the north.
Further falls of 25 to 50mm are forecast for the Wimmera and southern Victoria this week, with falls scaling down to 5-10mm in the northern Mallee and western Riverina.
Confidence is building that the investment in late spread urea will pay off.
The scale of crop production is topical as some traders believe estimates used by the USDA and others are too low.
The bearish traders believe that the current wheat forecasts for Australia at 26 million tonnes, Canada at 34 and Russia at 78 mt are too small and eventually higher production will be realised pushing prices lower. Last week traders reported a continual decline in the cash market for export wheat at Russian ports as exporters acted on their belief that the size of the crop will rise.
At the same time, wheat futures on the Chicago exchange lifted $3.10, corn surged $9.45 and consistent Chinese buying buoyed the soyabean market by $16 a tonne.
Despite a burdensome corn crop, traders have been caught short with a rally in corn futures last week prompting some to buy some cover.
New crop grain prices in south eastern Australia remain in a downward trend with cash wheat and barley prices slipping $3 and the ASX wheat futures falling $4 a tonne.
New crop canola prices remain steady at $590 a tonne delivered to the ports of Geelong, Melbourne and Port Kembla.
Crop conditions have pushed traders into ensuring they have the ability to export through ports in Victoria.
The export capacity for Portland has been filled from January to the first half of July next year, while Geelong is booked from December through to the first half of May.
The shipping capacity at Port Kembla is booked only for the first half of February.
Favourable production prospects are also pushing down canola and pulse prices.
In the past four 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.
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