This week’s heavy rain, particular in the north of the state will give winter cropping prospects a good boost. Many regions had a minimum of 25mm, while 50 – 100mm was common in the north of the state. Even though we are still in the first week of February, many regions have experienced above average rainfall over the past four months. Moree is 340mm above average, while Forbes (+185mm) and Wagga (+165mm) has had a wet summer.
Cotton and sorghum growers across southern QLD/Nth NSW will be enduring a tense time, with crops either inundated or hopes that levee banks will be able to hold back the floodwater. The La Nina weather pattern is once again proving its potential for extensive and extreme monsoonal wet weather. With several weeks yet to run of the wet season, farmers will be watching the weather maps carefully.
Harvest has commenced on the Downs, which did not receive the excessive falls experienced in the more western regions of southern QLD. Clear Grain exchange even had its first trade at the central Darling Downs Graincorp receival site of Brookstead. Downs crops look in good condition with above average yields expected. Pressure will come onto the handling system with the large carry over of winter crop in the system, with end users looking to capture cheaper grain during harvest. The recent rain will create new headaches for logistics, with rail continuing to undersupply the export markets providing strong delivered bids to attract ex farm stocks to meet export commitments. Only 337kt of wheat exported over the past 7 days, and a former colleague has told me they have had a ship on demurrage for two weeks off the QLD coast..!
Track prices continue to have good depth, with six traders at similar values. Prices are unchanged for the week at $190 Brisbane, with CQ ports at a $5 discount. While delivered prices into end users are showing a $10+ premium, this may balloon out if logistics continue to be strained.
Looking forward to new crop canola prices have rallied $15 over the last week to reach the contracts highest price since end of November. This is on the back of a rallying international oilseed market in both European (+€15) and Winnipeg futures (+ C$12). Thoughts that severe cold weather in Central and Eastern Europe may harm winter rapeseed crops where snow coverage isn’t adequate helped to support.
Although still very early days, warm (+9˚C above average) and dry conditions across the Canadian prairies have the market tentatively adding in potential production risk. On the positive side the risk of a wet spring (which plagued sowing and reduced acreage the previous two years) won’t be an issue in 2012, and both Canadian and American growers are planning on planting record acreage of canola that will pressure prices going forward.
Although it has been dry across the Prairies there is adequate subsoil moisture to kick off plantings in the spring. However due to lack of topsoil moisture, rains will be required to be timelier. Forecasts are calling for La Nina to be lingering until June; this could present some potential moisture stress issues.
New crop feed barley continues to gain in value, +$10 for the week, and a whopping +$25 since the start of 2012. The malt/F1 spread is now at $31, compared to the Jan average of $52. 2012/13 APW prices remain stuck in a tight trading range, with current prices, just $2 higher then the previous three-month average