Widespread rain, stronger US dollar boost confidence
Potential frost a threat to crops, but strengthening US dollar is supporting export prices.
CONTINUAL spring rain is supporting yield prospects in most parts of Victoria and the Riverina while rain in the central west and northern regions of NSW is providing more confidence and sellers.
While properties between Robinvale and Echuca have received less than 25mm this month, many properties in the eastern Riverina through to Dubbo have received between 50 and 100mm.
According to models, soil moisture conditions in these northern regions are better than those of the Mallee and the northern Wimmera, improving yield prospects for the northern wheat and barley.
With many wheat and barley crops now flowering, growers are also aware of the frost potential.
Some regions in northern NSW and South Australia’s mid-north have seen temperatures dip below zero degrees in the last week.
Additional incentive is being offered to growers ahead of harvest in the form of a $5 kick in the price of wheat and an impressive $13 a tonne lift in new crop barley, however canola prices are $20 lower this week.
These improvements in cereal grains stem from a strong US dollar which has pushed the Australian dollar down to more competitive levels for exporters.
Strength in the US dollar is due to a flow of funds to the perceived safety of the US currency
away from the new COVID impacts in the UK and some parts of central Europe.
Australian cereal grain prices remain relatively robust in the face of a sell-off in wheat futures with Paris slipping $2.75 and Chicago falling $16 a tonne.
Global wheat markets are watching the weather in Russia and around the Black Sea.
Planting of new crop wheat for these cheapest producers depends on more rain.
Some rain did fall last week but conditions are still considered dry.
A prime mover in US commodity markets has been soyabeans.
After a price rally spanning six consecutive weeks, profit takers have entered the market pushing Chicago futures down $21.40 a tonne.
Winnipeg canola futures followed this trend and fell $13.50 a tonne.
Local canola prices are suffering, with new crop prices falling $10 a tonne to $600 delivered to Victorian ports and on a Port Kembla basis.
Early yield estimates for dry land canola crops west of Echuca are about 1.7 tonnes a hectare.
For the third week, lentil prices are stronger, up $35 a tonne to $690 delivered to container packers in Melbourne.
MORE
WHEAT FUTURES UP DESPITE WEATHER GAMBLE
Wet spring, global outlook signal good returns for wheat
Forecasts for wheat output are now more than 30 million tonnes and new crop prices will be influenced by some of the most distant markets, which are experiencing a lack of rainfall.
Growers keep eyes on the skies
Challenging production outlook and lack of grower selling in Europe and the Black Sea region support price rises.