Ideal weather, prices shaping up to be windfall for growers

Strong prices are combining with a favourable finish. With only small volumes contracted, grain prices are peaking at the right time for growers. Read our expert analysis here.

Mixed bag: Warm weather in spring may have capped barley yields but wheat is thriving and pulse and canola crops are doing well. Picture: Zoe Phillips

THE lead-up to harvest looks promising for grain growers as mild weather is ideal for grain fill and prices are on the rise.

Dry weather in the Southern Plains of the US and southern Russia are limiting the planting window and yields of winter wheat in the northern hemisphere.

Last week, wheat futures in Paris shot up $10.50 a tonne, Chicago was up $16.30 and the ASX was up $6 to 318 a tonne.

The same drought that has contributed to the bushfires in California and Oregon is enduring, spreading further east and restricting planting rains for wheat growers.

However, it’s the dry weather in Russia that is generating a great deal of attention from speculators. The Russian government tends to apply restrictions on the exports of some of the world’s cheapest grain when domestic supplies become tight.

Cash markets are reflecting those trends and exporter bids are $10 higher this week with the benchmark Australian Prime White wheat price quoted at $319 a tonne Geelong port less freight to local sites.

BAR1 grade barley is also $4 a tonne higher, quoted at $234 on a Geelong basis.

Traders note that growers in NSW have been much more active as forward sellers of grain this season compared with growers in Victoria.

This may be due to a better cash flow position for the southern growers. Also, with the potential for a wet harvest, there is a reluctance to accept SFW1 grade price discount of $40 to $50 a tonne below the multigrade APW price.

With grain harvest around a month to six weeks away, growers are gaining some greater insight into the likely yields of their crops. Patchy rain of 5 to 25mm last week has benefited wheat crops in the southern Mallee and northern Wimmera but offers little to barley. According to growers these barley crops are starting to turn, and yield prospects are not following the same trajectory as wheat.

Grain analysts suggest that barley yields are around 20 per cent lower than wheat in the southern Mallee and northern Wimmera.

It is believed that the hot days in late September may have capped barley yields, whereas wheat is able to respond to further rain by filling more grains wide.

Pulse and canola crops are also responding to the mild weather and yield expectations are growing as are prices.

Nugget type lentils have increased $70 a tonne since the start of September and are quoted at $690 delivered to grain packers in Melbourne.

Dry conditions for the planting of soyabeans in Brazil remain the focus for the world’s oilseed markets.

Winnipeg canola futures were up $7 a tonne and Victorian canola prices remain firm at $606 a tonne on a Geelong basis.

MORE

WHEAT FUTURES RISE AS RUSSIA, US EXPERIENCE DRY WEATHER

RAIN FALLS IN VICTORIA INCLUDING IN PRIME CROPPING DISTRICTS

WET SPRING, GLOBAL OUTLOOK POINT TO GOOD RETURNS FOR WHEAT