Welcome to 2021.
We made it through 2020 relatively unscathed in agriculture, but there is still some way to go from a business perspective.
On the back of one of the largest national grain crops in a number of years, what's on our list of things to watch in 2021?
Russia and the Black Sea
The Black Sea region has risen to prominence in regard to global grain markets and will continue to have a significant bearing on values for this year.
Dryness concerns, throughout the region, and worries around the ability and condition of the winter crops, to make it through a potentially tough winter, are what has driven wheat values in the past few months.
The announcement in mid-December of an export ban and tariff on Russian wheat, to come into effect by February, is likely to be supportive. Increasing domestic grain prices in Russia, led by many domestic users, put pressure on the government to curb the high costs.
The export ban is such a measure that will reduce the amount of Russian wheat available on global markets.
With the Black Sea a key export region for wheat markets, any fall in production or reduction in the tonnage to be exported, will have flow-on effects to other grain markets and, consequently, the price we see here.
Global soybean and corn crop
Both corn and soybean markets overseas have seen continued support, due to dry conditions in key production areas, and currently sit at seven-year highs.
Such drivers have been increased demand out of China, supported by the gradual rebuild of the Chinese pig herd to near pre-ASF levels, and crop condition issues.
Dryness concerns throughout Brazil and Argentina have given support to corn and soybeans for some time now, adding to volatility felt in these markets.
Also, a backlog of vessels due to wharf strikes in Argentina reduced the flow of many commodities globally, particularly soybeans and corn.
At one point around 160 vessels were waiting to be loaded on the coast, worth a total of $1.5 billion.
There looks to be some support, at least for the meantime, in regard to fundamental drivers, which has been flowing onto wheat and canola markets elsewhere and, to an extent, Australia.
Currency is the thing that is strangling the gains in the futures being passed onto our domestic pricing.
As the US faces uncertainty generated from continued COVID-19 infections and the change over in presidency, the US dollar continues to weaken, strengthening the Aussie dollar in comparison.
Australia has also fared better in regards to COVID-19 infections and deaths, with our economic recovery more positive.
All of this news, both positive and negative to markets, is likely to contribute to the continued volatile nature of currency and, subsequently, our domestic grain prices.
Hopefully there is less talk of tariffs for the year ahead.
At this stage, tariffs remain a key barrier to trade and impact market access into a number of different countries.
The main one that has impacted Australian grain markets is barley into China. This is likely to continue to be ongoing and Australia will have to work hard to build new markets to take the amount of barley China took before last year's tariff of 80 per cent.
India is also one to watch on the tariff front. Late last year, to curb inflation of local food prices, the Indian Government reduced the lentil import tariff from 30pc to 10pc, allowing imports from Canada and Australia to begin entering their shores.
This tariff reduction period ran out on December 31, and it has since returned to the full 30pc.
If food inflation continues to occur, the likelihood the tariff will be relaxed is quite high, dependent on the rabi crop conditions and quality.
There is a lot of what ifs around the drivers of grain markets this year, and we won't get too much clarity until crop conditions out of the Northern Hemisphere are more known further into this year.
What we do know is that this year will be different to previous years as no two years are the same.
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