Croppers cheer price rally

Croppers cheer price rally


Cropping
WATCHING AND WAITING: Lower North farmer Tony Clarke has been watching grain prices carefully in recent weeks, but has held off signing any forward contracts, waiting to see if there are further upsides to the price rally.

WATCHING AND WAITING: Lower North farmer Tony Clarke has been watching grain prices carefully in recent weeks, but has held off signing any forward contracts, waiting to see if there are further upsides to the price rally.

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GRAIN prices have been on an upward climb this week, continuing on last month's trend and boosting croppers' hopes for a profitable season.

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GRAIN prices have been on an upward climb this week, continuing on last month's trend and boosting croppers' hopes for a profitable season.

Good rainfall has helped put a firm base to the season.

AWF Pty Ltd managing director Brian Bailey said the recent price rally was one of the fastest seen in decades.

"The price of APW wheat has increased by 30 per cent over the past month," he said.

"That's a massive increase. I can't remember an increase as great since the oil crisis in the Gulf."

While barley prices rose by 22pc in the past month, the price of canola saw a slight lift but was still strong at $563 a tonne delivered Port Adelaide.

Pulses, however, failed to follow cereal's upwards trend.

Mr Bailey said the US corn crop was the main price-driver.

"The US corn crop is in big trouble, and feed corn is the major feed grain traded in the world," he said.

"Yield estimates have come back substantially due to extremely hot and dry weather and depleting soil moisture conditions over large sections of the US Mid West.

"US forecasts have been scaled-back progressively over the last four weeks."

Driving world grain trends, though to a lesser extent, was the US soy bean crop.

"The US soy bean crop is less advanced as it's only going into the early podding stage," Mr Bailey said.

"The soy bean crop can recover if it gets rain in the next three to four weeks.

"Even if rains came tomorrow, the corn crops can't recoup the losses already built into the forecast."

Mr Bailey said it was unlikely that prices would drop significantly before the Australian harvest.

"I can't see it coming back any more than $20/t to $25/t," he said.

*Full report in Stock Journal, July 19 issue, 2012.

The story Croppers cheer price rally first appeared on Farm Online.

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