Grain merchants are focused on the Australian weather maps.
September 2023 is shaping up to be one the driest for many grain growing regions across Australia. At the time of writing, parts of NSW and Queensland are forecast to experience temperatures above 30 degrees for several days. This will certainty have a negative impact on production.
Farmer selling remains very slow on the mainland. There are reports that farmers continue to hold old crop stocks on farm, waiting to have a better handle on yields before making additional sales. Export demand has picked up, especially for wheat and barley.
Overseas markets have been choppy and largely range-bound as the market tries to find the equilibrium between a bearish economic outlook and a very bullish fundamental picture.
The US Government released their September statistics and showed global wheat ending stocks declining seven million ton in the crop year 23/24. If you ignore China and India, this the lowest stock level in over 10 years. As has been discussed previously the world is becoming more and more reliant on export flows out of Russia and the Black Sea. Despite ongoing drone strikes and military offensives, Russia and Ukraine continue to ship near record volumes of grains. Truly amazing.
Weather will be a key factor of grain prices over the next month. The path of least resistance appears higher.