Big news of the week was the announcement that the Chinese Government will drop the import duty on Australian barley.
This is very positive news for all Australian barley growers. Three years ago, China was the world’s largest importer of Australian barley. The announcement has seen barley prices on the mainland improve $10-20 AUD/ton.
Grain merchants are likely to remain cautious on pushing prices up too quickly until they have seen cargoes discharge in China. On paper Australian barley is cheaper than local corn, so we should expect strong interest.
The situation in the Black Sea continues to deteriorate with Russian and Ukrainian special forces targeting key grain infrastructure on either side. Russia bombed the Danube River ports again this week, while a Ukraine drone attacked the key Russian port of Novorossiysk. Fortunately, neither strike did any damage and boats were able to continue loading.
Fundamental traders remain very nervous that a major strike will happen sooner or later on Russian port facilities. If this were to occur we should expect prices to increase 20-30 percent as Russia is a major exporter of grains.
Global canola prices continue to firm with drought concerns persisting in Canada and strong demand for canola oil from the energy sector.
Excellent rains through the key cropping regions in Tasmania. Should be another great harvest this year.