Market Report 12/9/2013

ABARES released their September Crop Report this week, and as was expected Australian production estimates have been cut. The national wheat harvest has been pegged down 2% to 24.5mmt, down from 25.4mmt in June. This figure is still 2.4mmt higher than production for last year, and in line with the five year average. The severe dryness experienced in NSW and Qld has seen cuts to production outlooks, with NSW dropping from 7.6mmt to 7.2mmt, with the persistent dryness in the North of the state and pushing in to the Central West being the driver or yield loss, while Qld has been reduced from 1.8mmt to 1.7mmt. On the other hand ideal conditions in South Australia has seen their forecast improve by 1.1mmt over the June estimate to hold at 5.2mmt, a figure which if realised would be the second largest crop grown in the state. Exports have been trimmed by 100kmt to 19.5mmt, which is still an historically large number and partially stems from strong demand from China, whose own crop suffered harvest time rains. The USDA will release their monthly WASDE report tonight, with futures markets holding steady across the board in anticipation. The big ones to watch will be revisions to corn and soybeans, with the market expecting cuts in yields for the commodities. Whether these numbers come in line with market sentiments will be a large determinant of the direction prices are likely to take over the next few weeks.

ABARES made the obvious statement that production forecasts hinge on sufficient and timely rainfall for practically all growing areas in the country, especially for us here in the North. Hopes are forecasts for widespread rains for the start of next week will come through with enough moisture to push crops through to harvest. Basis for new crop prices has weakened in the last week, in some part due to the expected rain, however it would need to be a significant amount to have much of an impact for many growers.

A reminder that AgVantage will be running a series of pre-harvest meetings starting this Friday at Garah and Croppa Creek and going on in to next week. The meetings will include discussions on Grain Analysing equipment we are providing through Next Instruments, Kwik-Kleen Grain Cleaners and Superior Silos storage systems, along with a run through on market outlooks for the coming season. The first meetings on Friday will be at Garah Pub at 8am with bacon and eggs followed by Croppa Creek store at 5pm with beer and pizza.