Local Market Update

 

  • Growers are waiting for better soil conditions to resume planting, indications are the milling wheat area sown will be back.
  • Concerns around feed shortages due to adverse environmental conditions with high dairy MS pay-out have the dual effect of increasing demand while also giving growers confidence to hold onto grain in anticipation of higher prices.
  • PKE spot price is sitting around $335 per tonne ex store, forward contract product sitting around $315/t ex store.
  • Industry buyers showing more interest in securing grain for remainder of 2021.
  • Feed wheat pricing for 2022 supply contracts looking around $25/t up on 2021 level.
  • Procurement issues/changes in milling industry are still an area of concern for growers.

 

Ruralco are always looking for grain to supply a wide range of end users. Drop in your sample at any Ruralco Store, or call the Ruralco Customer Service Centre on 0800 787 256 to arrange sample bags or pick up. For queries about free or uncontracted grain that you would like to sell please contact the Ruralco Seed Team, or request a call back below.

 

Request a Call back

 

Canterbury Growers Pricing Per Tonne*

 

Import Pricing Per Tonne*

*Pricing at 5 July 2021.

Meet Our Experts

Craig Rodgers

GROUP MANAGER ON FARM SALES

@: Craig.Rodgers@ruralco.co.nz
Ph: 027 495 2029

 

John Scott

GRAIN & SEED CO-ORDINATOR

@: John.Scott@ruralco.co.nz
Ph: 027 227 7048

 

Jack Dudley

GRAIN & SEED CO-ORDINATOR

@: Jack.dudley@ruralco.co.nz
Ph: 027 238 9014

 

Australian Update

Second biggest winter crop valued at near-record $35.5 billion: ABARES

AUSTRALIAN farmgate production is on track for a record-breaking $66.3 billion year, thanks in large part to a near-record $35.5 billion winter crop in 2020–21, according to ABARES’ June quarter 2021 Agriculture Commodities report released late July.

The report shows how the agricultural sector has navigated the uncertainties and challenges posed by COVID-19 and changes in the international trade landscape.

ABARES acting executive director Dr Jared Greenville said the value of agricultural exports was forecast at just under $47 billion in 2020-21.

“ABARES has revised both the gross value of production and the value of exports up by $400 million from earlier estimates,” Dr Greenville said.

“This is due to strong domestic livestock prices, and because the pace of Australian grain exports has been faster than expected after harvesting the second largest winter crop on record.

“We have seen an impressive turnaround in wheat, barley and canola shipments. Particularly for barley, this result demonstrates the resilience of supply chains, the benefits of a diversified production base and access to a diverse range of international markets.”

Near-record crop value

The near-record $35.5 billion gross value of crop production in 2020–21 was boosted by Australia’s second-biggest winter crop on record and relatively high world grain and oilseed prices.

Grains, oilseeds and pulses accounted for 50 per cent of the value of crop production and horticulture for 34pc.

The gross value of wheat production is estimated at a record $9.7 billion, reflecting record production combined with relatively high prices. Barley and canola also recorded significant increases in value year-on-year.

Dr Greenville said next year (2021-22) the gross value of crop production was forecast to fall to around $33 billion from the high in 2020–21.

“Prospects are positive for the next winter crop which has seen record high area planted, but it’s very unlikely to see two record years back to back,” he said.

The total value of crop exports is forecast to increase by 17pc in 2020–21 to $25 billion.

Grain, oilseed and pulse exports have all rebounded significantly since the drought in 2019–20.

The value of wheat exports is predicted to increase by 60pc to $6.2 billion, the value of barley exports by 63pc to $2.4 billion and the value of oilseeds exports by 54pc to $1.8 billion.

Grain prices to fall

Dr Greenville said prices for most of Australia’s major export grains were forecast to fall.

The world wheat price is forecast to fall in 2021–22, which reflects increased supply and lower demand for feed wheat as corn supply is forecast to increase.

Higher production for Argentina, the European Union, the United Kingdom, Morocco, Ukraine and the United States is expected to more than offset reductions for Australia and Canada.

Production in the Russian Federation is forecast to be similar to last year’s record, reflecting higher area planted.

Corn and barley prices are expected to remain high but fall from current 2020–21 levels.

The world price of corn is expected to decrease in 2021–22 and world coarse grain production is forecast to increase to a new record.

However, relatively tight coarse grain supplies and strong demand are expected to continue to support prices at historically high levels.

Oilseed prices are forecast to remain historically high in 2021–22 due to strong global demand and tight inventories.

The world canola price is forecast to increase as consumption outstrips production.

Mouse plague hits crops, stored grain

Dr Greenville said the impact of mouse plagues had been locally devastating, but on the national scale damage had been reasonably limited.

“The worst impacts have been to stored grain and hay across parts of Queensland and New South Wales, although high mouse activity has been observed in many parts of the wheat belt,” he said.

“The worst of the mouse plague is likely to be behind us as cool and wet winter conditions slow breeding rates. There does remain a risk of a resurgence if winter is warmer than expected.”

Increased demand for cotton

Improvements in the economic outlook for major economies for 2021–22 and a recovery in the price of synthetic substitutes will likely result in increased demand for cotton and wool.

The increased availability of irrigation water in Australian cotton growing regions has led to the price of water falling from the highs reached during the drought.

Due to an increased supply of water and high international cotton prices, near-record plantings for irrigated cotton are expected, along with high yields in 2021–22.

The rainfall to support dryland plantings is less certain this far out from planting in September and October, but plantings are expected to rise slightly from 2020–21.

Feed Wheat Comparison

 

 

Feed Barley Comparison

 

World Update

HIGHLIGHTS

A reduced outlook for Brazilian maize is mainly behind a 3m t m/m (month-on-month) cut for world 2020/21 total grains (wheat and coarse grains) production, to 2,216m. With total consumption fractionally higher m/m and opening stocks trimmed, the carryover at the end of 2020/21 is lowered by 5m t. Mostly linked to larger than envisaged imports of maize, barley and sorghum by China, the forecast for global trade (Jul/Jun) is raised by 5m t, to 425m.

For 2021/22, increased projections for maize (+7m t m/m, mainly China) oats and minor grains (millet/triticale) lift the global production forecast by 9m m/m, to 2,301m. Given the lower carry-in and higher use, stocks are 2m t bigger m/m, at 597m. Larger predicted wheat imports in Near East Asia help to boost the total grains trade projection by 3m t m/m, to 418m.

On the basis of revised South American estimates, global soyabean output in 2020/21 is slightly higher m/m, at 363m t, a 7% y/y increase. The 2021/22 production outlook is maintained at a record of 383m t (+20m y/y). However, with a higher figure for carry-ins adding to supplies, stocks are predicted 2m t up m/m, at 53m (+11%), including an upgrade for the major exporters. The projection for trade is unchanged m/m, and is up 1% y/y at a new high.

Due to an upgraded estimate for India, world rice production in 2020/21 is lifted to a record of 504m t (+5m y/y), while total use is raised slightly to reflect increased utilisation of state reserves in leading consumers. The projection for 2021/22 production is marginally higher m/m and, with the increase matched by upgraded use, carryovers are unchanged m/m, at 171m t (+2m). World trade is unchanged m/m, at 47m t, steady y/y.

Early June gains were reversed later in the month, led by softer rowcrop values, and the IGC Grains and Oilseeds Index (GOI) fell by 3% m/m.

OVERVIEW

Total grains (wheat and coarse grains) production in 2020/21 is forecast at a record, including all-time highs for wheat and barley. However, with a strong rise in consumption, another contraction of carryover stocks is foreseen, to a six-year low. Partly driven by record imports by China, global grains trade (Jul/Jun) is seen at its highest ever.

Mainly linked to record crops of wheat and maize, world total grains production in 2021/22 is projected to grow by 85m t, to a new peak of 2,301m. Nevertheless, with food, feed and industrial uses all predicted at records, only a slight increase in carryover stocks is envisaged, leading to a drop in the all-grains stocks-to-use ratio to an eight-year low of 26%. Largely because of smaller shipments of maize (the first drop in 13-years), world total grains trade in 2021/22 is expected to be modestly lower y/y.

Global soyabean output is estimated to have risen by 7% in 2020/21 on sizeable harvests in the US and Brazil. Nevertheless, due to smaller carry-ins and record demand, inventories are predicted to tighten, including a heavy contraction in the US. Record trade is anticipated on bigger deliveries to Asia. The Council tentatively foresees a big world outturn in 2021/22 as high prices stimulate supply responses in key producers. Global uptake is predicted to grow, while a stocks recovery is likely, including modest gains in major exporters. Trade could expand by 1% y/y.

Due to bigger harvests in Asia, global rice production in 2021/22 is projected to rise by 2% to a fresh high. However, with growth in consumption set to moderate significantly – partly due to the likely scaling-back of COVID-19-related support schemes in Asia – stocks could edge up y/y. Trade in 2022 (Jan/Dec) is anticipated to be little-changed y/y, as a potential reduction in shipments to South Asia is offset by bigger dispatches to Africa. India is set to remain by far the world’s leading exporter.

MARKET SUMMARY

Mainly linked to a recent fall in rowcrop prices, the IGC GOI weakened for a second successive month, easing by 3%. Trading was occasionally volatile amid changeable weather forecasts and positioning ahead of USDA's Acreage report on 30 June.

Boosted by spillover from early month gains in maize and escalating concerns about adverse conditions for North American spring crops, the IGC GOI wheat sub-Index rose by a net 4% m/m.

After a period of two-sided activity, the IGC GOI maize sub-Index fell by 2% m/m, led by modest declines in South America and Ukraine.

With market activity curtailed by high freight costs and a shortage of shipping containers in Asia, the

The IGC GOI soyabeans sub-Index retreated by 7%. While prices were initially underpinned by supportive fundamentals, declines in soyaoil and beneficial rains for Midwest crops sparked subsequent losses.

 
 
 
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