Led by wheat, global grain markets have continued to rally off 4-year lows posted in August. Wheat markets have been gradually adding a price risk premium as stocks fall to 9-year lows and future supply uncertainty is heightened by global conflicts and sub-optimal northern hemisphere winter crop planting conditions, particularly across southern and central Russia.
Corn and soybean values have been supported by dry weather across South America, however, values have been kept in check by the smooth harvest of a near record US crop and increasing global stocks.
Canola prices have rallied on disappointing Canadian harvest results, declining production across Europe and Australia and projections for increased European imports.
In the next month, wheat prices will continue to rally as Black Sea runs out of grain to export and importers turn to stronger sellers in US and Australia. While global forecasters were anticipating a larger Australian crop would help to offset crop losses in Europe, dry early Spring weather and a severe frost event has limited Australia production prospects and current USDA forecasts for Australian crops are best case.
Higher wheat prices will drag local feed barley prices higher while increased European demand and lower Australian production will support canola values.
Russia intensifies attacks on Ukrainian grain infrastructure
In the past 3 months, Russia has launched over 60 attacks on Ukrainian grain ports (destroying over 300 port infrastructure facilities and nearly 200 cars) as it seeks to limit Ukrainian grain exports.
Shipping insurance premiums are rising while there is talk of some companies cancelling shipping out of Ukraine ports.
Ukraine accounts for 7 per cent of global wheat exports.
Local wheat prices move higher
Aiding the recovery in Australian values has been a lift in Russian wheat prices as availability of wheat tightens there. Russia has executed a very aggressive export program this year, however, there are fears that domestic supplies will be inadequate. Black Sea market analyst SovEcon reported that Russian wheat prices have gained around US$10/t in the last two weeks and are now at US$230/t. Russia’s Ag Ministry has requested an emergency meeting with exporters, possibly to restrict export volumes and, in a closed-door meeting, reportedly told exporters to lift offers to US$250/t, US$20/t or A$30/t above current values.
This chart shows Russian monthly wheat exports (‘000t) versus 5-year average. Source: LSEG workstation.
Wheat prices should continue to improve heading towards our harvest as Russian exports ease and global importers look to secure supplies out of Australia as a hedge against supply uncertainty elsewhere.
As Russian supplies dwindle, importers will need to source wheat from higher value suppliers in the US and Australia. Due to the way the season has unfolded and how prices have moved, there has been very little Australian new crop wheat sold.
Prices should continue to improve heading towards our harvest as global importers look to secure supplies out of Australia as a hedge against supply uncertainty elsewhere. In local markets, wheat delivered into southern ports has been rising quicker than those in other port zones owing to supply uncertainty across southern port zones.
Given supply uncertainty, prices for wheat delivered southern port zones have been rising quicker than wheat delivered to other major Australian ports with wheat now trading at above export parity into Vic/SA ports.
This chart shows APW wheat prices delivered at major Australian ports ($/t). Source: Profarmer and LSEG Workstation.
Feed grains dragged higher by wheat
International feed grain values have been kept in check by the rapid harvest of a large US crop, despite yields being clipped across Europe by a very dry and hot finish. Supporting values has been dry weather across South America which has slowed corn planting pace and is starting to drag on production forecasts.
Local barley values are being dragged higher by wheat and by reduced production prospects owing to dry weather and frosts across major southern barley producing regions.
This chart shows wheat and barley prices delivered Geelong ($/t). Source: Profarmer and LSEG Workstation.
Barley generally trades at a 5 per cent discount to wheat and rising wheat prices will support barley values
Local canola values following European rapeseed prices higher
Canola has been an interesting study with a bunch of influences creating uncertainty and volatility. Firstly, the announcement of the Chinese anti-dumping probe on Canadian canola has effectively suspended trade between the two countries, although there are whispers that Chinese buyers are starting to price Canadian canola in lieu of some import purchases.
Secondly, the EU has announced that it is delaying the implementation of its deforestation regulations by 12 months. These regulations would effectively ban soybean product imports from South America and shift business to exporters such as Australia and the US.
Thirdly, the prospects of a record large soybean plant across South America have probably been dashed by the late arrival of monsoon weather in northern Brazil. Forecasts have showers starting soon across Brazilian soybean growing areas, however, the late plant might clip plantings and yields.
Meanwhile production estimates across Europe are being wound back and eastern European rapeseed plantings are being switched to other crops given dry planting conditions. Crops in Australia have been knocked around by frosts and dry weather and it is unlikely that our production will meet estimates.
Australian canola prices are following European prices higher as European rapeseed stocks tighten and its deficit widens.
This chart shows canola prices delivered Geelong and Matif rapeseed futures. Source: ProFarmer and LSEG Workstation.
This table shows grower trade bids for grain in major Australian grain markets. Source: ProFarmer and LSEG Workspace.
Agronomy Update
There is not much to report from an agronomic point of view. Crops in most areas are in winter dormancy with soil moisture profiles gradually building and agronomists busy assessing yield potential and crop disease and formulating treatment plans for a little further down the track.
“Significant rains through western areas of NSW in the past couple of days have interrupted harvest and created some issues with chickpeas and canola laying down. Harvest is a bit variable depending on sowing date, however, they are windrowing canola west of Cowra and harvest should be in full-swing right across northern and central NSW in a week or two, rain dependent (more rain is in the forecast).
“We have been able to undertake a more thorough assessment of the impact of the frost and damage is not as significant as feared and certainly not as bad as the impact on crops across the Riverina. Most growers think that the frost damage might show up in a bit of pinched grain and will be happy enough to sort through those problems as they arise.” - Adam Little, Elders Technical Services Manager, NSW
Below is a summary of the October crop condition report completed by Elders district agronomists for New South Wales, showing percentage of crops rated either very poor, poor etc and comparing the September rating.
| Very Poor | Poor | Fair | Good | Excellent | ||||||
| Sep | Oct | Sep | Oct | Sep | Oct | Sept | Oct | Sep | Oct | |
| Northern Tablelands | 5 | 5 | 10 | 10 | 5 | 15 | 45 | 45 | 25 | 25 |
| North-West | 5 | 5 | 8 | 8 | 17 | 17 | 45 | 45 | 25 | 25 |
| Central Tablelands | 5 | 5 | 15 | 10 | 15 | 15 | 45 | 50 | 20 | 20 |
| Central West | 5 | 5 | 10 | 10 | 15 | 10 | 50 | 55 | 20 | 20 |
“Harvest has commenced in the Port Pirie region and just starting in the South Australian/Victorian Mallee, in and around cutting frosted crops.
“Retaining quality seed for 2025 will be a priority for most growers who will deliver minimal grain to receivals and having sound plans for 2025 to manage chemical residue and poor weed control due to sub optimal rainfall to activate the residual control of the herbicides.
“Some of the late rains the last few days will benefit very few crops and some of the lentils still holding on will welcome some moisture.
“Very few crops will be harvested across the Mid North with many crops being fed to stock but with limited biomass. Crops across northern parts of the Eyre Peninsula will be abandoned with better crops across the south. The Yorke Peninsula is below average but will be harvested.
“Crops in the South East and Adelaide/Fleurieu Peninsula are similarly below average and surviving on 5mm of rain here and there. With temperatures forecast to warm up and limited sub-soil moisture these crops will finish quickly.
“Crops across the Riverland and Mallee have been severely affected by frost, significantly reducing production potential.” - Lyndon May, Elders Technical Services Manager, SA
Below is a summary of the October crop condition report completed by Elders district agronomists for South Australia, showing percentage of crops rated either very poor, poor etc and comparing the August rating.
| Very Poor | Poor | Fair | Good | Excellent | ||||||
| Sep | Oct | Sep | Oct | Sep | Oct | Sep | Oct | Sep | Oct | |
| Adelaide and Fluerieu | 10 | - | 30 | 35 | 50 | 60 | 10 | 5 | 0 | 0 |
| South-East | 20 | 20 | 30 | 25 | 55 | 50 | 5 | 5 | 0 | 0 |
| Riverland Mallee | 25 | 25 | 50 | 50 | 25 | 25 | 0 | 0 | 0 | 0 |
| Eyre Peninsula | 10 | 15 | 40 | 55 | 45 | 25 | 5 | 5 | 0 | 0 |
| Yorke Peninsula | 5 | 5 | 55 | 55 | 40 | 40 | 0 | 0 | 0 | 0 |
| Mid-North | 40 | 40 | 55 | 55 | 5 | 5 | 0 | 0 | 0 | 0 |
Grains Industry of WA (GIWA) reports that “the lack of spring rain across the grain growing regions of Western Australia has resulted in yields sliding in many regions with wheat most affected. With a large proportion of crop (around 20 per cent) planted on fallow, some yields may hold up. The very large area of barley is in good shape as it is ahead of wheat in terms of grain-fill. Canola crops were late to emerge and have not had time to put on the growth that is necessary to support high grain yields.”
At this stage GIWA has WA winter grain production at below the 10-year average at 16.9 million tonne (mt), (wheat 9.3mt) with risk to the downside. ABARES puts the WA winter crop at 18.4mt (wheat 10.4mt).
Source: Grains Industry of WA.
“Crops have been cruelled by lack of moisture (Swan Hill around 120 mm for the growing season) and frost with crop ratings lower again for October.
“Lentils which on average were on track for 1 to 1.5t/ha are back to 200 to 400kg/ha. Best wheat and barley crops will be 2 to 2.5t/ha but average 1.5 to 2t/ha. Frost damage in both wheat and barley has been widespread, the full extent of which won’t be known till we put the headers in. Canola only makes up a small percentage of area sown in the Mallee, and this has also been hit hard likely only yielding in the vicinity of 500 to 700kg/ha with damage as high as 95 per cent of total crop in areas.
“Hot weather is expected towards the end of the week. Farmers further north will begin desiccating crops this week and some may even start harvesting some early barley. It’s all happening very quickly.”- Pat Conlan, Elders Agronomist, Swan Hill
“Not much change compared with September, if anything crop ratings may be back a tad. Still not much rain, the rain forecast if it eventuates will help grain fill. Minor localised frost damage in some areas on sensitive crops such as field peas.
“Average yields for cereals will be around 2t/ha average. We had quite a bit of canola planted with a wide range of yield (800kg to 1.5t/ha) potential depending on rainfall and soil type with most crops 1 to 1.5t/ha.
“We are about a month off harvest.” - Jono Fenwick, Elders Senior Agronomist, Echuca
“We have received 91mm since start of April and 11mm over 13 days during September. So, a very tough, dry season.
“Crops around Horsham are very poor but there are crops in the western Wimmera that are okay with some wheat crops looking at 4t/ha. Around 5 per cent of crops have been cut for hay. Plenty will get money back but a patch around Birchip and Warracknabeal is no good at all.
“Lentil crops have held on well and will yield 1 to 2t/ha if they can pick them up as they are not very tall. Cereals should average 2.5t/ha and canola has come back well 1.5 to 2t/ha with the big tap root getting down to find sub-soil moisture. Crops following canola haven’t done too well.
“Thankfully it’s not too hot yet with temperatures expected around late 20s early next week which is not too bad.” -Mick Preston, Elders Rural Products Sales Manager, Horsham
“We received a good autumn break, but it took a while for crops to germinate on our heavier soil types. Better rainfall in the last month has our crops ticking over and crop ratings are unchanged. Crops around Ballarat are good but out west towards Lake Bolac and Willaura crops are struggling – they have had another three frosts last week and some crops in the areas will likely now be cut.
“Some crops are being cut south of Ballarat due to frost. Barley has been most affected, later maturing red wheat is safe. Any early sown canola is looking good, and windrowing will start in another 2 to 4 weeks. The bulk of the cereal harvest is around 6 weeks away. Average yields 4 to 5t/ha for cereals and 2.5t/ha for canola. Faba beans have been struggling all year with the season being too dry.” - Mick Walsh, Elders Agronomist, Ballarat
“The impacts of frost and variable rain patterns have led to variable results in the wake of the last few months. The degree of damage experienced by growers was largely impacted by geography with some areas scathing through while others were badly impacted.
“In our dryland areas, canola appears to have been the worst effected with crops presenting promise of 2 to 3t/ha and exhibiting damage in the order of 40 per cent. With some crops totally wiped out.
“For wheat, frost impacts have been driven by sowing timing. Where growers were delayed, they have escaped damage whereas growers with early sown crops have been deciding whether to cut for hay.
“For growers who had limited frost damage, predominately tip burn, they decided to pull their crop through and have ended up with the crop compensating and heads filling well.
“Lastly, in the irrigation, winter cereals are powering along. Due to the availability and supplement of water, most crops are demonstrating limited frost effect and have good yield potentials. Crops range from 5 to 6t/ha post summer crops and 7 to 9t/ha on fallow ground.” - Meg Brown, Elders Agronomist, Griffith
“Frost impact has been dependent on landscape, last year’s crop, and variety. Wheat on Canola stubble is at 50 to 70 per cent loss. Scepter wheat was hit worse than other varieties like radar, with yields in the 1.5 to 3t/ha range.
“Barley seems to have been the least affected and should still go 3t/ha with 10 to 20 per cent loss. Canola wasn’t affected too bad, with an average of 30 per cent loss, yields 1.5 to 2t/ha.
“Field peas, lentils and vetch for seed were the crops hit the hardest. 50 to 80 per cent loss. However, crops have started to re-flower from the follow up rain and should compensate.” - Abygail Challis, Elders Agronomist, Griffith
“Frost impact has been dependent on landscape for severity in canola and barley but believe canola average 30 to 50 per cent loss. Crops would have had 2 to 3t/ha potential.
“Barely the same 40 to 50 per cent average loss on crop potential of 5t/ha. With both crops the range of frost damage is 10 to 100 per cent.
“Wheat more variable with frost. Guessing could be 20 per cent average loss, with 0 to 80 per cent range but the drying conditions has played a big role, with our yield potential has been cut largely by moisture. We may be looking more like 1.5-3t/ha, potential was a lot higher.” - Terry Edis, Elders Branch Manager, Ariah Park
Below is a summary of the October crop condition report completed by Elders district agronomists for the Vic/Riverina region, showing percentage of crops rated either very poor, poor etc and comparing the August rating.
| Very Poor | Poor | Fair | Good | Excellent | ||||||
| Sep | Oct | Sep | Oct | Sep | Oct | Sep | Oct | Sep | Oct | |
| Eastern Riverina/North-East Vic | 0 | 10 | 75 | 75 | 25 | 15 | 0 | 0 | 0 | 0 |
| Wimmera | 5 | 10 | 20 | 20 | 65 | 60 | 10 | 0 | 0 | 0 |
| Mallee | 0 | 10 | 30 | 40 | 60 | 40 | 10 | 10 | 0 | 0 |
| South-west | 0 | 0 | 15 | 15 | 60 | 60 | 25 | 25 | 0 | 0 |
| Goulburn Valley | 0 | 0 | 70 | 70 | 30 | 30 | 0 | 0 | 0 | 0 |
| Central | 0 | 0 | 10 | 10 | 80 | 80 | 10 | 10 | 0 | 0 |
| Riverina | 0 | 0 | 5 | 15 | 45 | 40 | 40 | 40 | 10 | 5 |
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The information contained in this article is given for general information purposes only, current at the time of first publication, and does not constitute professional advice. The article has been independently created by a human author using some degree of creativity through consultation with various third-party sources. Third party information has been sourced from means which Elders consider to be reliable. However, Elders has not independently verified the information and cannot guarantee its accuracy. Links or references to third party sources are provided for convenience only and do not constitute endorsement of material by third parties or any associated product or service offering. While Elders has exercised reasonable care, skill and diligence in preparation of this article, many factors including environmental/seasonal factors and market conditions can impact its accuracy and currency. The information should not be relied upon under any circumstances and, to the extent permitted by law, Elders disclaim liability for any loss or damage arising out of any reliance upon the information contained in this article. If you would like to speak to someone for tailored advice specific to your circumstances relating to any of the matters referred to in this article, please contact Elders.