Skip to main content

Insights June 2022

16 June 2022 |Cropping
Crop image

Insights June 2022

16 June 2022 |Cropping
The June 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.

Commodity Overview:

  • Winter crop sowing is nearing completion with wheat production estimated at above 30 million tonnes.
  • Grain prices are volatile, influenced by news affecting any changes to global supply.
  • Australian prices remain discounted to international values due to supply chain constraints and positive production prospects.

Majority of the winter crop has now been planted. Wet conditions in parts of Queensland and New South Wales continue to delay planting. But at this stage, there is potential for above average production in all states. Given current conditions, wheat production is estimated to exceed 30 million tonnes.

Strong export demand for wheat is underpinned by Chinese demand. Wheat exports to China to the end of April are a record high 3.78 million tonnes. China's previous largest wheat imports for a full season totalled 2.39 million tonnes. Strong export demand is coming from traditional demand points in Asia (wheat), Middle East (barley) and Europe (canola). Demand is supported by tight global supply caused by conflict in Ukraine and poor northern hemisphere production.

International pricing remains volatile as markets respond to any news impacting potential supply. News Russia may allow grain exports out of Ukraine ports has softened global prices. At the same time, the poor condition of US crops has provided support. Australian prices are following the trends of international markets but remain at a discount to international benchmarks. Supply chain limitations prevent Australian exports from matching demand from importers. This situation prevents Australian prices from reaching parity with international prices however continues to maintain local prices near historical highs.

Australian grain prices will continue to experience volatility in line with international markets. Positive production prospects will maintain negative basis, a situation which will remain in the near term. Eventually, local conditions will come into play. Should production remain positive, prices will face downwards pressure from current levels. But tight global supply will ensure values remain at the higher end of historical prices.

 

Sources: Profarmer Australia

Related Topics

Most Popular

Cropping 09 May 2022
Insights May 2022
Cropping 15 March 2022
Insights March 2022
Cropping 12 April 2022
Insights April 2022
Cropping 13 April 2021
Insights April 2021
Rural Bank - A Division of Bendigo and Adelaide Bank Limited
© Copyright 2022 Rural Bank | ABN 11 068 049 178 | AFSL/Australian Credit Licence 237879