All about the national and international grain market and how grain contributes to farm inputs and costs.
International and national summary
National background comments: report for the week ending 15th June, 2018
The next update will be on Friday 22nd June, 2018. Direct links to reports on each dairy region immediately follow this international and national summary for grain.
Driving Prices Up
- Dry conditions in Russia and the Black Sea region continue to cause concerns and have resulted in revised production forecasts.
- According to market analyst the USDA might lower Brazil corn production estimates which could add further support to corn prices. The corn market underwrites much of global feed grain prices and if corn prices increases global feed grain prices are likely to follow.
- The EU grain lobby organisation Coceral revised their wheat production forecast downwards, to 138.8 million tonnes.
Driving Prices Down
- The European grain crop continues to look in good shape.
- US wheat prices are currently too high to be competitive on the export market.
- US corn prospects have improved due to favourable weather over the past few weeks.
- The harvest in the US continues to advance, increasing liquidity on the market.
Global Trade News
- According to the White House Trade Advisor, president Trump is considering imposing 25% tariffs on a “subset” of Chinese imports that the administration included in its original list of around $50 billion in targeted products. So far it’s difficult to say what China’s response will be to these tariffs and what effect it will have on markets.
- Prices remain firm across Australia. Reportedly there seem to be more interest from growers selling this week, particularly in south east Australia where rain fell last week.
- NSW once again missed the rain and conditions continue to deteriorate. Weather forecasts still suggest dry conditions in the next week.
- WA crop conditions have turned around in the past few weeks following rain. Similarly conditions in Victoria and SA have improved after last week’s rain event.
- Strong domestic prices mean we are not buying much export demand, keeping the majority of Australian wheat on shore.
- Reports suggest some customers in QLD feedlots are rationing demand to some extent at current prices.
- Weather forecasts suggest some rain over the next week but nothing major for the parts of NSW that need it the most.