Wheat steady on small volumes, canola at $611/t

Cereals have faced some strong demand, but canola has a promising new crop outlook. Read more.

The summer rain has lifted soil moisture profile while removing the seasonal risk for crops like canola. Picture: Chloe Smith

WHILE there are significant volumes of unsold grain remaining on farm, growers are keeping their eyes on their new crop programs and canola prospects.

Although brokers report trades at $628 a tonne on a Geelong port basis for prompt delivered EU-certified, non-GM canola, trader bids for canola sit at $611 a tonne for both old and new-crop canola.

Wheat markets are lacking strong direction either way.

International futures markets traded last week in an up and down fashion, resulting in little change to domestic values.

According to brokers, the level of activity is a little busier this week, but there is still not a high volume of grain changing hands.

Global oilseed markets have been supported recently by the troubled soyabean harvest in Brazil.

This world leading producer is suffering a wet soyabean harvest which is delaying crop delivery and lowering both quality and quantity.

Soyabean prices have also been supported by lingering dry weather, which has plagued Argentinian growers.

Compared with prices over the past 10 years, canola is currently trading at a decile 8.7 and wheat is trading at decile 7.2.

While both price trends are positive for growers, the summer rain has provided a good profile of soil moisture to remove some of the seasonal risk for high margin crops such as canola.

Soil moistures throughout southern and central-west NSW are above average at 25 per cent of capacity and further rain is forecast to provide another 15 to 25mm this week.

In this same weather pattern, southeast Queensland and northeast NSW are forecast to receive 50 to 100mm, falls that are desperately needed for winter cropping on the parched Darling Downs.

The positive outlook for grain and livestock enterprises will generate strong competition for land use.

The arable cropping area in Australia has stabilised over the past 10 years and high prices for sheep, lambs and cattle are expected to pull some cropping area in NSW back into pasture.

Although the area sown to canola in NSW increased by a factor of four last year, growers are finding it difficult to source canola seed and some mixed farmers are intending to focus on building their cattle herds.

Lentils are finding a secure place in Victorian rotations and should see expanded acreage this year.

Lentil prices have slipped again this week, down $5 a tonne to $695 delivered to grain packers in Melbourne.

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