May 19, 2011

 

Australia has favourable sowing conditions

 

 

Australian grain farmers are occupied with either preparing or sowing paddocks as suitable weather conditions permit sowing in most Victorian crop areas.

 

The Mallee and Wimmera received less than 10mm of rain last week while the Western District received up to 50mm. Many areas of South Australia have been without rain now for six weeks.

 

Although paddocks have sufficient sub-soil moisture, most growers in South Australia's southeast are waiting for planting rains before committing the seeders to the paddocks.

 

Early sown canola is coming under pressure from mice eating freshly germinated plants at ground level.

 

In the past week, extensive damage has been reported in North East Victoria between Devenish and St James.

 

Growers are limited in their response due to the shortage of the registered bait.

 

Many have stopped sowing until supplies of bait become available or mice numbers are curbed by frosts and cold weather.

 

New crop canola prices are AUD24 (US$25.62) higher this week to AUD582/tonne (US$621.28) delivered to Geelong for non-GM canola.

 

Shifts in global weather patterns are making a big impression on crop prospects and market sentiment.

 

Dry weather in France and Germany is impairing development of wheat and barley.

 

US wheat producers in Oklahoma and Texas are also suffering from dry conditions.

These farmers are expecting to begin harvest soon and their crops may not benefit from further rainfall.

 

At the other end of the moisture profile, paddocks in Canada are wet.

 

Planting spring crops of wheat and barley have been delayed in Canada by as much as 20-40 days behind normal.

 

Many of these farmers were in a similar situation last year and unable to plant a crop due to excessively wet paddocks.

 

Similarly, planting of spring wheat in the southern states of Louisiana and Mississippi has been delayed due to flooding.

 

Despite these weather disruptions to crop development, the USDA increased production forecasts in the US, Canada and Europe last week.

 

Grain markets have pulled back sharply since this report.

 

Traders are reassessing the grain markets. Further bearish news that is yet to hit the market is the potential return of the cheapest sellers of cereal grains in the world.

 

It will be several months before crops develop in the massive production areas around the Black Sea.

 

As the largest producer in this area, Russia is not announcing any changes to existing bans on grain exports imposed after their drought last year.

 

Domestic stock feed markets are unchanged this week, however most export-related wheat prices are easier this week.

 

AGP wheat is AUD2 (US$2.14) lower at AUD198/tonne (US$211.36) delivered to the ports of Geelong and Portland, AUD3 (US$3.20) lower in Adelaide and unchanged at Port Kembla.