Feed grains focus on northern hemisphere new crop

Argentina is projected in 23/24 to be the third-largest corn growing and exporting nation. A recent report by the Buenos Aires grain exchange has reduced the 23/24 production forecast from 54 million tonnes to 52mt due to widespread reports of disease impacting yields.

Russian growing regions are looking dry on the 14-day rainfall outlook, with the southern and central districts being the most affected. The Russian corn and barley crops are now in their April sowing window and will require improved rainfall for early plant establishment. Russian FOB prices in 23/24 kept pressure on global markets. Multiple seasons of high production and a low currency have helped with continued sales and reasonable returns for Russian growers in ruble terms. If dryness does not persist and Russia has another bumper crop, it's expected that Russian feed exports will keep a lid on global prices.

French planting had been experiencing high rainfall through the spring barley and wheat sowing window. Spring planting is now 86 per cent complete but would usually be completed by this time of year. Winter barley is rated at 66pc good-excellent (92pc last year), spring barley is 61pc good-excellent (97pc last year). A reduction in French spring barley production is anticipated as a result. France is the EU's largest barley producer, producing 22pc of their annual production.

Brazil's rainfall outlook which was looking dry in early Safrinha corn crop development has since switched to a more favorable forecast. This crop is to be harvested in June-September and accounts for 73pc of Brazil's 112mt estimated 23/24 corn crop. The improving conditions have subsequently prevented the broader market from maintaining its prior bullish momentum.

Closer to home, China's return to the Australian barley market last August saw a resurgence in barley exports to China. In January, China accounted for just over 510,000 tonnes or 84pc of AUS feed barley exports, and 212,000t or 67pc of AUS malt barley exports. However, the pace of exports started to slow in the new year, with January feed exports to China down 27pc and malt down 30pc.

China has been in the market for Australian sorghum, with 97pc of sorghum exports in January destined for China. High rainfalls across north-eastern Australia in recent weeks have delayed the sorghum harvest and is causing both yield and quality concerns; this could provide further price support for Australian barley, with prices in the Downs lifting by $10 in early April.

Planted area committed to barley in Australia has declined in recent years due to the 2020 anti-dumping tariffs. Barley production subsequently shifted from the prior three-year average of 14.3mt down 25pc to 10.8mt in 23/24.

Australian barley pricing has been increasing of late, driven by new season supply uncertainty and the recent upset to the sorghum supply. Global feed price upside has been suppressed by the improving corn crop conditions in Brazil. All eyes will be on the European and Russian weather conditions to garner further insight.