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Insights February 2020

3 February 2020 |Cropping
Crop image

Insights February 2020

3 February 2020 |Cropping
The February update provides an analysis of production and pricing trends for Australian broad acre farmers. It provides producers with a timely overview of current trends and an outlook for the coming months. 

Overview

  • China’s purchase of 1 million tonnes of wheat took the global grain market by surprise, with an estimated 300-
    500 thousand tonnes coming from Australia.
  • Sorghum production forecast to be 85 per cent below average despite some planting after January rainfall,
    increasing pressure on wheat and barley to satisfy domestic demand.

Offshore wheat values are expected to remain flat for the coming quarter. United States winter wheat plantings are estimated to be close to the lowest on record, and suggestions Russia may restrict wheat export volumes. Despite this uncertainty, global wheat production is forecast to increase 4-5 per cent year-on-year.

Australian cereal prices are expected to hold at current levels, maintaining premiums to international markets. There is potential upside to prices should export pace remain at current levels and domestic users increase bids to lock in supply. Given Australian grain values are already close to the highest globally, increases are expected to be limited to 3-5 per cent.

Dry conditions saw Australia’s winter crop harvest wrapped up nearly a month earlier than usual. National wheat production was 39 per cent below average, in part due to Western Australian wheat production declining 48 per cent year-on-year.

Improved growing conditions in Victoria resulted in a 17 per cent increase in national canola production year-onyear. Despite the increase, canola production was 26 per cent below average.

          

Source: Profarmer Australia

 

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