Global grain market up­date

The Northern Star - Northern New South Wales Rural Weekly - - INSIDE ABOUT YOUR RURAL WEEKLY - Peter McMeekin Grain Bro­kers Aus­tralia

AS HAR­VEST of the drought-rav­aged win­ter crop gains mo­men­tum here in Aus­tralia, Euro­pean farmers are also very busy, juggling their sum­mer crop har­vest pro­gram with the seed­ing of win­ter ce­re­als, oilseeds and pulses.

The Euro­pean sum­mer was warmer and sig­nif­i­cantly drier than nor­mal, and these un­sea­sonal weather con­di­tions have con­tin­ued into the au­tumn. While this is the ideal sce­nario for the sum­mer crop har­vest, it is se­ri­ously hin­der­ing the plant­ing and emer­gence of the win­ter crops in af­fected ar­eas.

The dri­est re­gions stretch from north­ern France, through Bel­gium, north­ern Ger­many and into the drought de­clared ar­eas of east­ern Poland and the north­ern Czech Re­pub­lic.

Fur­ther south, most of the Balkan coun­tries, es­pe­cially Ro­ma­nia, are also ex­tremely dry. The seed­ing pro­gram is lag­ging be­hind the five-year av­er­age in all of these re­gions.

At the mo­ment the rape­seed crop has been the most af­fected, de­creas­ing the area sown and com­pro­mis­ing emer­gence. The op­ti­mal sow­ing win­dow is Au­gust through to mid-Septem­ber in most of Europe and good early de­vel­op­ment be­fore the win­ter sets in is crit­i­cal for good yields.

Fore­casts sug­gest that the Euro­pean Union rape­seed area could be down as much as 8 per cent com­pared to last sea­son.

The plant­ing win­dow for ce­re­als is still open and the pro­gram is on­go­ing. The area planted to wheat is fore­cast to be more than last year due to the higher price rel­a­tive to al­ter­na­tives. Add the swing from rape­seed and the pro­gram is sig­nif­i­cant. How­ever, there is al­ready talk of re­sow­ing in iso­lated pock­ets, due to ex­tremely poor emer­gence.

Sub­stan­tial rain­fall is still re­quired in many re­gions to en­sure that the po­ten­tial area is ac­tu­ally planted. The risk here is that tem­per­a­tures start to drop, and it be­comes very dif­fi­cult to get into fields be­fore the win­ter sets in, leav­ing some Euro­pean coun­tries well short of their in­tended crop area. It is far too early to be ring­ing any alarm bells but the po­ten­tial im­pact on Euro­pean pro­duc­tion, global ce­real sup­ply and in­ter­na­tional grain prices is weighty.

Rus­sia sur­prised the market by in­creas­ing its to­tal 2018 grain pro­duc­tion fore­cast to 109mmt. This is up from 106mmt last month af­ter favourable weather in Siberia led to a bet­ter than ex­pected wheat har­vest in the east of the coun­try.

The higher pro­duc­tion num­ber leaves 38–39mmt of to­tal grains avail­able for ex­port this sea­son.

Mak­ing news here in Aus­tralia over the past week was the 420kmt added to the ship­ping stem in Western Aus­tralia.

This is the largest weekly in­crease since May this year but quite small rel­a­tive to a more nor­mal sea­son. Some car­goes may be des­tined for the east coast but some are un­doubt­edly go­ing in­ter­na­tional. This con­firms that Aus­tralian ex­porters are see­ing de­mand at cur­rent FOB val­ues and are com­pet­i­tive against Black Sea of­fers.

Asian de­mand and the ex­pected slow­down in Black Sea of­fers should en­sure that Aus­tralia con­tin­ues to pick up the re­quired de­mand for an ex­port wheat and bar­ley pro­gram that will be the low­est in many years and could eas­ily be un­der 8mmt and 3mmt re­spec­tively.


OVER­SEAS MAR­KETS: Grain Bro­kers Aus­tralia’s Peter McMeekin said the de­mand for Aussie wheat and bar­ley in Asia could be un­der 8mmt.

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