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Grain Report Tuesday - 13th June

Market Almost Open - CGX daily report

What price do you want for your grain?

Overnight moves in international markets and yesterday's actual traded prices across Australia are below to help you determine your price. If you need to change your offer price, simply edit it before market open.

Chart including Wheat CBOT prices, Wheat Black Sea prices, Canola ICE prices and Canola MATIF prices

Grain trade prices for Australia Grain (wheat, barley, Sorghum, Lupins, Canola, Faba Beans, Oats, Chickpeas and lentils)

Dominic Hogan Outlook commodities comments

Look Out!

  • Happy birthday to Charlie. What are the chances, his birthday is on the same day as the Queens?

  • The USDA released the June World Ag Supply and Demand Estimate Pick A Number report on Friday night.

  • And like the Lions performance at the G, it was disappointing.

  • Wheat was bearish, with world production up a staggering 11 million tonnes from the May report and breaking through the 800 million tonnes for the first time ever.

  • Congratulations, you all deserve a pat on the back; now don’t complain about lower prices, as you are all growing too much all over the world.

  • World wheat ending stocks increased 6 million tonnes.

  • Apparently, we are also going to eat more wheat this marketing year.

  • The Aussie crop was left at 29 million tonnes, as they predicted in May.

  • They upped the Ruskies crop by 4.5 million tonnes to 85 million tonnes.

  • Places like Canada and China were left unchanged, even though there has been dryness in one and floods in the other.

  • The most important price driving number, the stocks held by the major exporters increased by just over 3 million tonnes (Russia), to 56 million tonnes.

  • However, now this is important, so stop scrolling Tik Tok and pay attention, as I will only say this 120 times over the next 6 months; the stocks held in the majors’ exporters warehouses falls away by 5 million tonnes this year.

  • Now, add in, a few production concerns and slight reductions in Canada, Australia, Argie, Ruskie Spring wheat, Ukraine spring wheat and dam flooding.

  • The corn report was bearish, with world production forecast to increase by almost 70 million tonnes to 1.22 billion tonnes.

  • But ending stocks only increased by 16 million tonnes.

  • They must think there will be some blockbuster movies produced this year, as we all flock to the cinemas and stuff our gobs with popcorn, as consumption increases by 41 million tonnes.

  • We saw this year with higher corn prices, wheat finds its way into animal feed rations.

  • With a large world corn production forecast, abundant corn supply equals lower prices, so the forecast is for corn feeding and ethanol production to increase.

  • The one big question mark over the corn balance sheet is the gurus left the US corn yield at 181.50 bushels per acre.

  • Given the dry start in some major production areas, a lot of traders and analysts and the plumber next door all think this yield forecast is too high.

  • The current corn condition rating released last night has the crop rated at 61% Good to Excellent, which is 3% lower than last week. This crop has only just been planted, so early days.

  • But some analysts are starting to compare the current soil moisture conditions and forecast expectations with the 2012 crop.

  • In 2012, the June USDA forecast the Corn crop to be 375 million tonnes with an average yield of 166 bushels per acre and the farm gate price USD $165 – USD $195 per tonne.

  • By September (harvest), the yield had fallen almost 30% to 123 bushels per acre, dropping production by 100 million tonnes to 272 million tonnes, with a farm gate price of USD $280 to USD $340 per tonne.

  • Again, very early days, but one to watch, because if corn production falls away, this will push wheat prices higher as we cannot afford to feed too many Asian chickens with wheat, as the major’s stocks are already tight, so wheat prices firm to keep it away from chooks.

  • Now, just for fun, throw in the Black Sea conflict. That situation hasn’t resolved itself. Maybe it won’t, who knows, but it’s an unpredictable variable with only upside price potential.

  • I say that because, if it does resolve itself and everyone shakes hands and goes home, I still don’t think the backside will fall out of the market in the near term as it won’t change the current world S&D fundamental.

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