The El Nino has arrived for the Australian grain market.
Key growing regions on the mainland have seen very little rainfall so far in September, with the forecast showing above average temperatures and no rainfall. Crop estimates are likely to be reduced each week, but not in a dramatic sense given the subsoil moisture and the fact that the El Nino has been so well forecast.
ABARE have estimated the Australian wheat crop to be 25.4 million tons, barley at 10.2 million ton and canola at 5.2 million tons. The important thing to note is that these estimates are 30% lower than last year’s record crops.
Global prices continue to soften with Russian exporting a record 6.8 million tons of grains during the month of August. September looks like it will be similar. Analysts continue to be surprised by the amount of grain that can be moved in a war zone.
Russian wheat is now significantly cheaper into Southeast Asia, compared to Australian wheat.
Mainland prices continued to firm this week with China reportedly continuing to buy barley and wheat. Keep in mind that Russian grain is not approved for importation into China.
Tasmanian crops received timely rainfall this week and are in generally in very good shape. Prices for grains and oilseeds remain firm.