State's grain estimates climb

Rise in South Australia's grain estimates


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The additional tonnes may mean grain has bypassed Viterra and has been either stored on farm or been moved east without going via the system.

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The size of the 2018/19 Australian wheat and barley crops were increased by ABARES this week. 

Curious: Estimates of additional tonnage of grain could be the result of sellers either storing more on farm or selling without going through the system. Photo: Supplied.

Curious: Estimates of additional tonnage of grain could be the result of sellers either storing more on farm or selling without going through the system. Photo: Supplied.

Wheat production is up 342,000 tonnes against the December estimate thanks to an additional 82,000t in South Australia and 470,000t in Western Australia more than covering further downgrades on the east coast. 

Barley production was lifted 998,000t with an extra 1.076 million tonne in Western Australia.

Additional 82,000 tonne of wheat 'found' in South Australia

Supplies of grain in New South Wales and Queensland have tightened though, with estimated wheat, barley and sorghum production falling by 479,000t compared to levels expected in December. This “lost” grain will have to move east from South Australia and Western Australia to fill domestic shortfalls.

Meanwhile grain prices continue to fall with a big gap between high old season prices and lower new season prices. 

There is no point in traders or growers holding grain into new season positions on the current price signals.

That simply increases the incentive to sell 2018/19 grain and may add to downward price pressure until there is real tightness in the domestic balance sheet.

Europe is facing the same price signal, and with their season much closer to the 2019 harvest, there is real pressure to quit old season stocks. At the same time demand from North Africa seems to have declined. 

The end result is that European Union prices are falling, dragging down global wheat prices. That is spilling over to our market as well.

The increase to our production numbers will not be helping the current market either.   

The bigger supply of barley from Western Australia may exert more downward pressure on domestic wheat and barley prices unless they can find lucrative export outlets for that grain.

Here in South Australia it is hard to see where the extra wheat tonnage has come from.   

The December production estimate was not really supported by delivery data from Viterra. 

The additional 82,000 tonne of wheat must mean that even more grain has bypassed Viterra and is either stored on farm or has been moved east without going via the system.

  • Details: Contact Malcolm Bartholomaeus on 0411 430 609, email malcolm. bartholomaeus@gmail. com or @Malcolm_Bart 
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