Mixed start to winter cropping season

Crop-walkThe latest ABARES Australian Crop Report (released 12 June) details a mixed start to the 2019-20 winter cropping season.

Above-average rainfall in May improved soil moisture in some key regions in SA, Victoria and southern NSW.

However, poor autumn rainfall following a hot, dry summer will likely hamper production in most other regions, including WA, northern NSW and southern Queensland.

While the outlook suggests any crops that have established successfully may receive enough rainfall to survive until spring, the Bureau of Meteorology’s very poor winter rainfall outlook will be a concern for crops in earlier growth stages.

Combined production of wheat, barley and oats for 2019-20 is forecast to rise 20% year-on year, to surpass 31 million tonnes.

The 20% annual rise must be put into perspective, however, as production in 2018-19 was severely hampered in most regions other than WA. Furthermore, the 2019-20 winter crop is expected to remain 10% below the 10-year average to 2018-19.

Ultimately, the supply constraints, which drove domestic grain prices to near 10-year highs in the last 12 months, are likely to remain in place throughout 2019.

Following an easing trend, which emerged after October 2018, feed grains have rallied during the past month. Declining prospects for the winter cropping season have impacted markets, as end users face the increasingly likely scenario of a third straight year of diminished local production.

Looking to feed grain indicators, delivered Darling Downs (Profarmer) wheat has risen 7% over a four-week period, to $405/tonne on 14 June.

Barley lifted 11% to $415/tonne over the same period, while sorghum rose 3% to $342/tonne.

Further to the south, feed grains remain discounted relative to Darling Downs indicators. Wheat delivered Riverina sat at $370/tonne, while barley was trading at $362/tonne.

https://www.mla.com.au/prices-markets/market-news/few-bright-spots-in-winter-crop-outlook/

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