Whats the key to upside in grain prices? Crop report added

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Whats the key to upside in grain prices? Crop report added

Sep 9, 2019 | 15:08 1 Macdon02 errol ?

Is it beans beans beans? Or ultimately corn is king as usual and prices will follow corn yields, talking all crops will follow corn in sympathy.

See wheat traded on its own today.

Australian crop getting downgraded by the day not that it matters.

Domestic prices on the rise again.

cheers
Last edited by malleefarmer; Sep 9, 2019 at 16:19.
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Sep 9, 2019 | 16:09 2 War with taliban Reply With Quote
Sep 9, 2019 | 16:19 3 PROSPECTS for Australian winter crop production in 2019–20 deteriorated over winter because of unfavourable growing conditions in some regions, particularly in New South Wales and Queensland, according to ABARES’ Australian Crop Report released today.

Crop prospects vary considerably between the states.

In Victoria, most crops are in good to very good condition at the beginning of spring as a result of generally favourable growing conditions over winter.

Timely winter rainfall in Western Australia boosted yield prospects to around average for most crops in the state after a late break to the season.

Crop prospects in South Australia are mixed but sufficient winter rainfall fell in most major southern growing regions and the Mid-North for crops in these regions to be in reasonable condition at the beginning of spring. However, crop prospects are generally below average in most northern cropping regions in South Australia.

Seasonal conditions were very unfavourable in most cropping regions in New South Wales and Queensland and winter crop production in these states is forecast to be very much below average.

As in every season, early spring rainfall will be important to final crop outcomes.

According to the latest seasonal outlook, issued by the Bureau of Meteorology on 29 August 2019, September rainfall is likely to be above average in WA and below average in most other cropping regions. October rainfall is likely to be below average in most cropping regions.



Winter crop below average
Winter crop production is forecast to rise by 11 per cent in 2019–20 to 33.9 million tonnes (Mt), which is a downward revision of 7pc from the forecast ABARES published in June.

Forecast production is around 16pc below the 10-year average to 2018–19.

Wheat production is forecast to increase by 10pc to around 19.1Mt, 22pc below the 10-year average to 2018–19.

Barley production is forecast to increase by 14pc to around 9.5Mt, 6pc above the 10-year average to 2018–19.

Canola production is forecast to increase by 6pc to around 2.3Mt, 29pc below the 10-year average to 2018–19.

Total area planted to winter crops is estimated to have increased by 6pc in 2019–20 to around 19.1 million hectares (Mha). This reflects the large amount of crop area that was taken out of grain production in 2018–19 and cut for hay.



Big dry cuts summer crop forecast
The area planted to summer crops is forecast to fall by 28pc in 2019–20 to around 758,000 hectares.

This reflects low levels of soil moisture and an outlook for unfavourable seasonal conditions during spring in Queensland and northern New South Wales.

The area planted to grain sorghum is forecast to decline by 21pc in 2019–20 to 391,000 hectares, which is 30pc below the 10-year average to 2018–19.

This forecast fall is due to low soil moisture levels in southern Queensland, which are expected to fall further during spring. However, this is partially offset by improved soil moisture levels and favourable seasonal conditions forecast for spring in some parts of central Queensland.



Low water, price hit cotton prospects
Additionally, falling cotton prices are likely to result in a shift from dry land cotton to grain sorghum. Production is forecast to fall by 22pc to 992,000 tonnes. Yields are assumed to average slightly lower than in 2018–19.

The area planted to cotton is forecast to fall by 58pc to 145,000 hectares because dams servicing cotton growing regions have significantly less water than last year.

The projected cotton area is the lowest since 2007–08, when 63,000 hectares was planted.

Production is forecast to decline by 39pc to around 294,000 tonnes of lint and 416,000 tonnes of cottonseed.

Lint yields are forecast to average higher because almost all planting is expected to be irrigated.

The area planted to rice is forecast to remain largely unchanged at low levels in response to low water allocations. Reply With Quote
Sep 9, 2019 | 16:22 4 Confusing as many govt crop reports are, basically in a nutshell 2 million tonne has been shaved off australian forecast yeasterday edit wheat tonnes Reply With Quote
Sep 9, 2019 | 16:41 5 Personally i like corn here, there's a story, there's demand, and it's holding 354 here today, this is a huge level of previous resistance that's now become support. I would make decision on feed grains based off this 354. Stay bullish assuming we stay above and bearish if we dip under on more then a monthly basis, i use continuous charts so front month till options expire, then roll to next closest. Chi Wheat has a risk of eroding to 415 but yr end i have a 535 target, use that level as a swing number as well, bias determined whether over or above. Corn simply had to do a retest, if we hold 354 on yr end the top end opens up closer to $7 for next yr, I'll be watching the Dec 31 close to position into Jan report. The corn wheat spread likely will keep acres out of wheat and thinking corn. If you've seen the price of soy in Argy pesos ive posted, there's nothing left to explain on oilseeds. I have 2 thoughts moving forward, all cereals in 2020, or assuming the July low in canola holds here tomorrow and we have a turnaround tuesday im looking for a high to lockup 2020 oilseed production using puts or fwd pricing. Europe can't grow canola due to the neonotic ban this is about the only ray of sunshine i see, soy needs a close over 929 to start a rally. 1063 is the big number, similar to 439 corn. There's gonna be a ton of "bad" signals coming through currency, most of them will be false. See argy bean price. Basically every currency in the world is devaluing to USD due to central banks. It's not all doom and gloom but my bias is wheat or corn for 2020 Reply With Quote
Sep 9, 2019 | 16:46 6
Quote Originally Posted by malleefarmer View Post
Confusing as many govt crop reports are, basically in a nutshell 2 million tonne has been shaved off australian forecast yeasterday edit wheat tonnes
Noticed we shipped 6 boatloads of wheat to your island..... I'm surprised you don't hate us lol Reply With Quote
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  • Sep 9, 2019 | 16:55 7 mallee . . . 2020 may be a tough year in-general for global commodities. Markets simply won’t entertain rallies for very long given heavy debt-driven deflationary environment. Rallies will be seen as short-term pricing opportunities (IMO).

    And the Russian wheat price FOB port has fallen 10 percent since late August to 11,000 rub/Mt or about $4.75 per bushel U.S. for 12 percent protein. My math may be out, but close. Ukraine / Russia wheat battle intense . . . .

    Russia now talking-up possibility of $25 oil in new year. Oil is king of commodities and a direct influence on ag. Geo-political conflict could stir up commodity prices temporarily, but again short-term price bursts at best. Reply With Quote
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  • Sep 9, 2019 | 16:55 8
    The problem with beans is there's an absolute wall of resistance that needs to get plowed through, it can't happen in a single event, this'll take 3 or 5 attempts to chew through it. It gets worse if I overlay the monthly and quarterly timeframes. Reply With Quote
    Sep 9, 2019 | 16:57 9
    Quote Originally Posted by errolanderson View Post
    mallee . . . 2020 may be a tough year in-general for global commodities. Markets simply won’t entertain rallies for very long given heavy debt-driven deflationary environment. Rallies will be seen as short-term pricing opportunities (IMO).

    And the Russian wheat price FOB port has fallen 10 percent since late August to 11,000 rub/Mt or about $4.75 per bushel U.S. for 12 percent protein. My math may be out, but close. Ukraine / Russia wheat battle intense . . . .

    Russia now talking-up possibility of $25 oil in new year. Oil is king of commodities and a direct influence on ag. Geo-political conflict could stir up commodity prices temporarily, but again short-term price bursts at best.
    I don't think $32 wti is out of the question on yr end Reply With Quote