Local Market Update

 

  • Harvest is now well under way, and we are starting to see varying results in both quality and yield of harvested crops.
    • Southern dry land areas have been affected by lack of moisture.
    • Mid Canterbury is looking to have an average season.
  • There is still some carry over wheat from the previous season.
  • Feed barley price is still trading above feed wheat price.
  • PKE spot price has increased to around $350 per tonne ex store.
  • Industry buyers remain cautious in pricing of 2021 harvest grain.

 

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 February 2020.

 

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

Mild, wet summer stretches SW Victoria harvest into February

Winter crop harvest in Victoria’s south west has extended into the beginning of February with growers still waiting to take off the last of this season’s crops as the mild, wet summer drags on.

Although acknowledged as part of Australia’s high rainfall zone, growers in the region normally expect to have harvest finished by about January 10.

But this year there have been few opportunities to knock over the harvest in the normal time as below-average temperatures and persistent rainfall have been a hallmark of the summer, including more heavy falls over the past week.

 

Figure 1: Rainfall totals for Victoria in the week ending January 31.

 

Dagro private agronomist in south west Victoria, Craig Drum, said while many producers had finished harvesting the weekend before last prior to this last lot of rain, he estimated there was still about five to 10 per cent of the harvest to go.

“We have had the most drawn out harvest since 2010 – two days on, one week off; two days on, one week off,” he said.

“The biggest issue is that it hasn’t been warm enough to get the grain moisture down. We had no rain between Christmas and New Year, but it never got above 23 degrees. We just couldn’t get the grain moisture down. People were harvesting a sample every day and wheat was at 16 per cent moisture.

“There is still crop to harvest south of Lake Bolac, including a couple of big corporates who were getting bogged 10 days ago.”

Mr Drum said while yields had been maintained, the protracted harvest had had an impact on grain quality, particularly for anyone growing white wheat which had shot and sprung.

“Most of the wheat in this environment is red wheat which has lost tonnage, but it goes into the feed market. It yields 20 per cent better than white wheat,” he said.

“We have been lucky. We have had outstanding yields. I’ve had clients who have averaged over sown acres just over nine tonnes/hectare of wheat. Most are around 6.7t/ha. A few guys have had around 4t/ha canola and a lot of guys between 3.4 to 4.0t/ha.”

Feed Wheat Comparison

 

 

Feed Barley Comparison

 

World Update

HIGHLIGHTS

At 2,210m t, the forecast for world total grains (wheat and coarse grains) production in 2020/21 is 9m lower m/m (month-on-month), as a large reduction for maize (mainly for the USA, Argentina and Brazil) is only partly offset by increases for wheat (including for Australia, Canada and Russia) and barley (Argentina, Canada). The outlook for grains consumption is lowered by 5m t, to 2,216m, with downgrades for feed and industrial uses of maize outweighing small increases for other coarse grains and wheat. Mainly linked to a downward adjustment for maize, the forecast for all-grain stocks at the end of 2020/21 is down by 5m t, to 611m, representing a 6m y/y (year-on-year) contraction. The figure for trade (Jul/Jun) is trimmed to 408m, as increased projections for shipments of wheat, barley, sorghum and oats do not entirely compensate for a cut for maize.

The first projections for world wheat supply and demand in 2021/22 point to record production and, despite higher consumption, a further accumulation of global stocks. However, the build-up of stocks is again expected to be centred on China and India. An above-average level of trade is predicted, even if not as high as the record of the year before. Russia will potentially export less than in 2020/21, but could remain the largest exporter.

Mostly reflecting downgraded expectations for South American crops, the Council’s outlook for global soyabean production is cut by 6m t, to 359m, still up by 6% y/y. Although the reduction is partly offset by a higher figure for opening stocks – linked to reluctant sales by Argentine growers – consumption is still trimmed by 4m t, to 365m, a 4% y/y gain. While world carryovers are seen little-changed m/m, at 45m t (-6m y/y), the outlook for major exporters’ inventories is cut by 2m, to 10m, the sizeable y/y contraction stemming from a plunge in US stocks. The forecast for trade is maintained at 168m t, a modest y/y fall.

Global rice production in 2020/21 is forecast broadly unchanged from before, at 503m t but, due to a lower figure for opening stocks, total supplies are trimmed by 2m m/m. As consumption is lifted to a new high, world carryovers are lowered to 175m t (+1m y/y), with much of the downward adjustment due to the major exporters, notably India. At 45m t, the projection for trade in 2021 is little-changed and represents a modest recovery y/y.

With all the components higher, but with the strongest gains for maize and soyabeans, the IGC Grains and Oilseeds Index (GOI) rallied by 10% since the November GMR.

 

OVERVIEW

World total grains (wheat and coarse grains) production in 2020/21 is forecast to expand by 23m t y/y, to an all-time high of 2,210m, including record harvests of wheat and barley. Although the COVID pandemic continues to dampen demand in some sectors, particularly for fuel ethanol and brewing, overall consumption is predicted to grow for a fifth successive year, to 2,216m t (+24m y/y). This includes gains of 8m t for both maize and wheat, and increases of 2m each for barley, sorghum and oats. Another drawdown of world grains stocks is envisaged, to a five-year low of 611m t (-6m y/y). The decline is entirely because of a drop in maize inventories, to an eight-year low, led by contractions in the US, China and the EU. In contrast, wheat stocks could climb to a new high, although the expansion is mainly in China and India, while the aggregate carryover of wheat in the major exporters is expected to be little-changed y/y. World barley stocks are seen at an 11-season peak, partly because of a sharp rise in Australia following a bumper harvest. Including solid increases for shipments of wheat, maize and sorghum, global grains trade in 2020/21 (Jul/Jun) is expected to reach a record 408m t, up by 4% y/y.

Despite dwindling southern hemisphere prospects, world soyabean output in 2020/21 is still expected to rise by 6% y/y, mainly on a much larger US crop. Underpinned by growth in China’s feed sector, global use is seen expanding by 4%, to a high of 365 m t; increased processing in the major exporters is also likely, underpinned by local and international demand for soyabean products. Global inventories are predicted to contract for a second consecutive year, with major exporters’ stocks plunging to 10m t, the y/y drop of around 60% tied to a heavy reduction in the US. While a modest increase in deliveries to China is likely, tightening availabilities and elevated prices could dampen buying by other importers as trade falls by 1% y/y. US dispatches are seen rising by about one-third y/y, to a new high.

Global rice output is tentatively expected at a new peak on bigger outturns in Asian producers, including India and China. Consumption is also forecast to trend higher on population growth, albeit with uptake in India potentially declining due to the conclusion of COVID-19-related food security schemes. Following a contraction in the prior season, world stocks could edge up, including a modest gain in India. That country is also expected to maintain its position as the dominant exporter, although shipments may retreat from the prior year’s record as Thailand regains some market share. World trade is predicted to expand by 5% y/y on stronger demand from sub-Saharan Africa.

 

MARKET SUMMARY

Global export prices saw further strong gains since late November. Led by solid advances in maize and soyabeans, the IGC GOI climbed by 10%, to its highest since July 2013.

The IGC GOI wheat sub-Index posted a 9% gain since the last report, on supportive supply-side fundamentals and spillover from rowcrops.

The IGC GOI maize sub-Index rallied by 13% on deteriorating South American crop outlooks and tightening US availabilities.

Including broad-based gains across the leading suppliers in Asia, the IGC GOI rice sub-Index rose by 6% since late-November.

Amid dwindling US supplies and heightened worries about production prospects in Argentina and Brazil, the IGC GOI soyabeans sub-Index increased by 11%, up by 52% compared to a year earlier.

 
 
 
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