Skip to main content

Insights March 2024

11 March 2024 |Cropping

Insights March 2024

11 March 2024 |Cropping
The March update provides an analysis of production and pricing trends for Australian broad acre farmers.

Commodity Overview

  • Strong wheat exports out of Russia along with another projected large crop for the upcoming season has pressured global prices lower. Australian prices have had to follow Russian values lower in order to maintain export demand.
  • China have returned to the barley market after Lunar New Year holidays at much lower levels. This drop in demand has seen prices fall across all port zones over the past month.

Global grain markets kept falling in February. Chicago Board of Trade (CBOT) wheat prices dropping to three and half-year lows at the time of writing. Russian wheat exports have remained strong as exporters search for demand to clear out old season stocks ahead of the prospect of another massive crop. This ample supply has caused Russian prices to drop. They have fallen significantly since the start of the year. Wheat values in other key origins, Australia included, have had to follow Russian values down.

From an export perspective, whilst there is still demand for Australian wheat, it has tapered off. Australian wheat being relatively expensive into Asia has meant a more traditional hand to mouth buying program for many exporters. Buyers have plenty of short-term cover and weak demand. So, they have little reason to return to the market to chase grain and push up prices. Shipping data shows that the projected 18 million tonne wheat export program to the end of February is 47 per cent complete. Exporters still have some work to do in the back half of the marketing year to fill this program.

The global barley market remains quiet and is grinding lower in line with weaker wheat and feed grain markets. On the Australian export front China have returned to the market after Lunar New Year holidays at much lower levels. Monthly barley exports to China from October through to January averaged 650 thousand tonnes. In February this dropped to 400 thousand tonnes. The export stem is showing a slight pickup in barley exports for March, but not back to amounts that would provide a significant and sustained lift to prices.

Local canola markets held up better than cereals over February. Prices across most port zones steady to up a few dollars for the month. A cut to European Union (EU) rapeseed production estimates supportive of prices. Current forecasts for this season anticipate total EU output will be eight per cent lower than in 2023. Overall sentiment in the oilseeds complex remains bearish due to ample soybean supplies in South America. Both Brazil and Argentina are poised for a large soybean harvest. If realized this will lead to a surplus in the region and a projected increase in global stocks this season.

Australia’s national forecaster ABARES have released their March Australian Crop Report which has added to the overall supply side. Wheat production was raised two per cent to 26 million tonnes. Canola was raised three per cent to 5.7 million tonnes, while barley was cut three per cent to 10.8 million tonnes. Summer crop prospects saw a significant boost on the back of favourable soil moisture conditions. Sorghum production saw a 38 per cent upwards revision to two million tonnes. This puts production 26 per cent above the ten-year average.

Summer rainfall was better than expected. It boosted east coast crop production. It has also boosted confidence for the 2024/25 winter crop. Despite a very dry February which has seen topsoil dry out, sub-soil moisture levels remain very full. A decent rainfall event prior to seeding will kick the season of positively. For Western Australian cropping regions, the end of a very dry summer was met with heavy rainfall from ex cyclone Lincoln. Whilst still early, these rainfall events have added moisture to the soil profile along with increasing sentiment for the start of the upcoming season.

A graph showing Australian wheat and feed barley price over the last 12 months. Cheap and ample wheat exports from Russia have pressured global prices lower. Australian values have had to follow to maintain export competitiveness. Local barley market have fallen inline with wheat along with a drop in demand from China.
A graph that shows Geelong canola price over the last 12 months. Prices across most port zones steady to up a few dollars for the month. A cut to European Union (EU) rapeseed production estimates supportive of prices.

Source: Profarmer Australia  

This article is intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s). The information herein is believed to be reliable and has been obtained from public sources believed to be reliable. Rural Bank, a Division of Bendigo and Adelaide Bank Limited, ABN 11 068 049 178 AFSL/Australian Credit Licence 237879, makes no representation as to or accepts any responsibility for the accuracy or completeness of information contained in this report. Any opinions, estimates and projections in this report do not necessarily reflect the opinions of Rural Bank and are subject to change without notice. Rural Bank has no obligation to update, modify or amend this article or to otherwise notify a recipient thereof in the event that any opinion, forecast or estimate set forth therein, changes or subsequently becomes inaccurate. This article is provided for informational purposes only. The information contained in this article does not take into account your personal circumstances and should not be relied upon without consulting your legal, financial, tax or other appropriate professional.

Related Topics

Most Popular

Subscribe to insights today

Receive reports direct to your email by subscribing to Rural Bank Insights.

Bendigo and Adelaide Bank acknowledges Aboriginal and Torres Strait Islander peoples as the First Peoples of this nation and the Traditional Custodians of the land where we live, learn and work. We pay our respects to Elders past and present as it is their knowledge and experience that holds the key to the success of future generations.

Rural Bank - A Division of Bendigo and Adelaide Bank Limited
© Copyright 2024 Rural Bank | ABN 11 068 049 178 | AFSL/Australian Credit Licence 237879