COMMODITY UPDATE
Market Observations: February

With harvest 2022/23 largely finished, we have a better understanding of the quality available to the industry for the coming year.

The season has produced some diverse results to say the least and as an industry we have the challenge of working through the plethora of varying grades. Low test weights, low falling numbers, weed seeds in the sample at storage and handling sites will not be uncommon in many regions. The prevalence of weed seeds in particular was brought about by the perfect growing conditions just prior to the commencement of harvest. Coupled with this was the inability to eradicate the problem due to lack of paddock accessibility. In many cases, 3-4 applications of herbicide would be applied to paddocks but heavy down pours of rain continuously created the perfect growing environment for weeds and rain also hindered machinery access to paddocks in order to deal with them. Field fungi also presented in some areas.

Despite all of these issues, the overall crop was considered to be a resounding success. The higher levels of protein was also unexpected in cereal crops.

Industry commentators are estimating the National crop yields at quite varying levels but all agree the crop has been substantial.  Some have denoted the Wheat crop between 36 to 37 million tonnes, with others suggesting the crop is closer to 41 million. That being the case, it would put it right in contention with the biggest crop the country has ever produced. This may be too high for two main reasons. Test weight and East Coast abandonment. The Western Australian crop was very significant breaking all sorts of records and the South Australian crop followed suit. The East Coast tonnages indicated by some market commentators seem unlikely. Parts of Victoria and NSW have produced Wheat (and Barley) that is very light which directly affects the overall crop yield. With Wheat expected to test in the high 70’s kg p/hl, the industry has seen quite a bit of sub 70kg p/hl come to the market. Volume of grain produced is no doubt very large but to produce enough weight to supersede our biggest ever crop by 3 million tonnes, with these weight issues, might be a stretch.

Markets have been quite subdued over the last couple of weeks. Growers have concentrated on packing up gear after a long and arduous harvest. Grain buyers have largely received their fill for now. As a result the market is slightly softer with not a lot of volume trading, time will tell which way prices move based on how eager the seller and buyer are to come to market.

The challenge of 2023 will be the availability of logistics in supporting the industry with the large export program that will ensue across the year. All ports will be flat out moving the abundant crop while we look forward to servicing our domestic clients with the best possible outcomes for them.

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Author

Justin Fay
Commodity Manager