Wheat futures up despite weather gamble
Challenging production outlook and lack of grower selling in Europe and the Black Sea region support price rises.
RAIN at this time of the season is closely anticipated by growers as it determines many of their final input applications to crops.
On the back of forecasts calling for 10 to 15mm of rain in all parts of southeastern Australia except the northern Mallee and the Riverina, unfortunately some growers invested in further fungicide sprays or delayed cutting hay crops.
Despite the probability caveats of official forecasts, this highlights some of the considerable weather risks experienced by grain growers.
On the upside for growers, and partly due to the disappointing rain, prices are higher this week.
The dry conditions delaying planting of crops in Russia and the Baltics, strong demand for corn to China, wheat demand from buyers in the Middle East and challenging production outlooks in both Argentina and Australia combined to push wheat futures up $6.90 a tonne in Paris, $16.60 in Chicago and $12 a tonne on the ASX.
A lack of grower selling in Europe, Australia and the Black Sea region has also supported prices.
New crop cash prices delivered to Geelong and Melbourne ports are also $8 higher at $295 a tonne for Australian Premium White but BAR1 grade barley remains steady at $220 a tonne.
In pulse markets, most current season prices are lower this week, with field peas $60 a tonne lower and lupins falling $55.
Faba beans for either prompt or harvest delivery are unchanged at $405 a tonne delivered to Melbourne packers.
But old crop nugget type lentil prices are $23 a tonne higher at $655 delivered Melbourne and new crop are $20 a tonne higher at $640 delivered Adelaide.
According to pulse traders, in order to build lentil stocks, the Indian government has reduced the tariff on lentils from 30 per cent to 10 for shipments that arrive prior to October 31.
This will suit greater volumes from Canada but some old crop supplies from Victoria and South Australia will still make the shipment deadlines.
Some of the biggest price spikes have been in oilseed markets. A surge in soyabean demand from China has underpinned a 20 per cent or $88 a tonne rise in Chicago soyabean futures since August 10.
Canola futures in Paris and Winnipeg have risen 5.1 and 8.7 per cent respectively in the same period.
Trade bids for new crop canola are $18 a tonne higher at $610 a tonne delivered to the ports of Port Kembla, Melbourne and Geelong less freight to local site.
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