Grain prices remain low

FE Team | Published: September 22, 2022 22:43:51

SYDNEY, Sept 22 (ABC NEWS): By all metrics, Australia is set for another monster year of cropping.
With harvest starting in the coming weeks in Queensland, Australian Bureau for Agricultural Resource Economics and Sciences (ABARES) this month estimated a winter crop of up to 55 million tonnes.
Accuracy and unforeseen weather events not withstanding, it could be the fourth-largest harvest in Australian history.
But this stunning success, with a third bumper crop in as many years, has come with a downside.
Despite spending the best part of the last decade at a premium to other grain exporting nations like the United States, the Australian price has fallen below its international competition.
Thomas Elder Markets analyst Andrew Whitelaw said there were multiple forces pulling grain prices down for Australian farmers.
"You've got extra supply so that has a pressure on the overall marketplace," Mr Whitelaw said.
"You've got to get that out of port, and our infrastructure is running at full capacity, so that brings things down.
"But also there's no fear of missing out, the grain traders don't have to rush out and buy grain fearing it won't be there tomorrow."
One of the great unknowns this year is the availability of grain from Russia and the Black Sea region.
Russia and Ukraine combined produce a quarter of the world's wheat available for export.
The Russian export season has begun, and a recent agreement has allowed Ukraine to begin shipping grain from its Black Sea ports.
Managing director of Victorian grain broker GeoCommodities Brad Knight said the next few months would play a key role in setting local grain prices.
"Russian and Black Sea grain is starting to become available, and it's significantly cheaper than Australian grain on the world market," Mr Knight said.
"The question mark remains around the availability of that grain, and that'll be a challenge for all the global consumers this year.