Bad weather disrupts early harvest in Mallee

SCATTERED rain bought early harvest to a halt last week with up to 30 millimetres of rainfall across the Mallee. The heaviest rainfall was on the weekend where much of the Mallee recorded more than 20 millimetres.

This was accompanied by strong wind gusts which proved difficult for canola crops blowing much of the crop out of wind rows making the harvesting process even more difficult.

Rainfall was lighter in the Wimmera where most areas recorded 10 to 15 millimteres for the week. Most crops through the Wimmera are still green so are benefiting from the mild, damp weather as it prolongs the dry down process which will benefit yields.

News that China bought 500,000 tonnes of Australian Standard White wheat was a boost to local wheat prices last week. It’s seen as unusual for exporters being prepared to sell significant quantities of grade specific ASW ahead of harvest. The move indicates exporters are expecting lower than normal proteins this season following the wet summer and favourable growing season.

The 500,000 tonne sale to China was seen as large as it represents half of their forecast wheat imports for this year. Some analysts think the ASW wheat may be used to meet their booming feed grain demand as it is significantly cheaper than corn. China is forecast to import between 2 and 5 million tonnes of corn this year.

Two weeks ago, China bought 900,000 tonnes of U.S. corn.

In a signs of the world’s plentiful wheat supplies, the International Grains Council raised its world wheat production forecast to 684 million tonnes which is just shy of the record crop of 685 million tonnes in 2008/09.

IGC also raised their forecast of Black Sea wheat exports to 37 million tonnes compared to the United States Department of Agriculture’s forecast of 34 million tonnes in light of the current record export pace. This compares with last year’s Black Sea wheat exports of just 14 million tonnes of wheat following a devastating drought in Russia.

Russia’s grain exports for June to mid-October reached a record 11.5 million tonnes supporting the IGC’s sharp jump in grain export forecasts.

Cracks are starting to emerge with the pace of the Russian export pace with Egypt recently acknowledging shipment delays with Russian wheat.

The strong export pace from the Black Sea region is making it difficult for traditional wheat export countries including Australia as they struggle to compete with the cheaper wheat.

World grain prices were choppy last week with most of the market attention focusing on the E.U. debt situation. Commodity markets have been anxiously waiting for the E.U. to unveil a sustainable debt plan to sure up global economic growth over the medium term which helps to underpin commodity demand.

Last week U.S. hard red winter wheat prices gained $6 per tonne to $310 FOB U.S. Gulf while soft red winter wheat gained $6 per tonne to $268 FOB. Black Sea wheat prices gained last week with export offers gaining around $8 per tonne to $248 FOB.

U.S. corn prices were unchanged at $282 FOB.

World barley prices firmed last week following some stronger international export competition with Algeria and Jordan securing feed barley. Black Sea barley prices jumped by $10 per tonne to $260 FOB while E.U. barley gained $12 per tonne to $278 FOB Rouen.

A 3.5 cent rise in the value of the Australian dollar worked against export prices last week as the currency climbed to back to its highest levels since early August.

Last week local old crop H2 wheat prices fell by $12 per tonne to $248 delivered Geelong port. Old crop premiums are eroding quickly with the new crop harvest just around the corner.

New crop multi grade APW bids gained $1 per tonne to $219 delivered Geelong with ASW bid at a $25 per tonne discount.

New crop canola bids gained $5 per tonne to $535 delivered Geelong.

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