Growers in marginal country with harvest underway due to dry conditions have now accepted a reduced winter crop is their best outcome
With an El Niño now officially confirmed by The Bureau, this has become a two-tier season where marginal cropping areas affected by the dry conditions will face a reduced winter crop harvest, while higher rainfall croppers will remain relatively unaffected, for this season at least.
A reduced winter harvest is underway in some marginal cropping regions where weather conditions across September has thrown up several challenges including widespread frosts early in the month that caused damage to cereal crops.
The full extent of the crop damage to marginal areas and how it will affect the overall harvest result will also be clouded by the dry conditions that have spread further south on both the east coast and Western Australia.
These combined effects have prompted industry analysts to revise production estimates even lower with the wheat harvest to fall within the 23 to 25 million tonne range.
While the rainfall across the country over the past week will help stabilise yields and shore up production in the upper end of that range.
Harvest in dryer regions has commenced in most states with conditions in stark contrast to last year. For instance, this year the growing season rainfall was below average for most regions and coupled with temperatures were above average in September.
As a result, this year’s harvest is several weeks ahead of last year. And while it’s too early to get a good reading on the quality profile of this year’s crop, early results are mixed across different geographic spreads.
Price discrepancies
International wheat futures have fallen over the past month, pressured lower by strong supply out of Russia.
Prices then hit three-year lows in late September when data showed that US wheat stockpiles were bigger than expected by analysts. These low prices have sparked some fresh demand with some significant sales of US made following the declines.
Prices have since rallied 5% off these lows indicating that US wheat is finally competitive at these values.
Australian wheat prices also fell over the past month despite yield prospects declining, with softer international markets working to keep a lid on local prices.
After a stellar run since China re-entered the local market barley prices peaked in late September, but prices have dropped four per cent since then as international demand has waned with a large Chinese domestic corn crop and strong imports from Brazil competing with Australian feed barley into that market.
Local canola values saw the largest decline this month falling around 5.4% on the back of ample global supplies. European Union 2023-2024 canola production was revised 0.6 million tonnes higher to 19.5 million tonnes. Strong selling pressure from Canadian growers is also a bearish influence on prices.
