Given the prospect of El Niño hampering Australian grain output when stockpiles are already low, Rabobank states that the country’s grain and oilseed prices will be supported throughout this year.
Australian east coast wheat futures reached a four-month high, increasing 13% in approximately three weeks, while in Sydney, futures are running at a 28% premium to Chicago, indicating concern over the return of an El Niño weather pattern that hasn’t been seen in five years and which typically causes excessive dryness for Australian grain production.
As farmers are planting their winter crops, there is ongoing concern regarding a lack of rain. "There has been no significant rain for Queensland, northern New South Wales, South Australia or Western Australia, with Queensland and northern New South Wales needing it to continue their planting," Pentag Nidera said.
As concerns mount that without adequate rainfall below average crops will be harvested, some Australian farmers are already shifting to the production of barley, a more drought-tolerant crop.
Lynda Kiernan is Editor with HighQuest Group Media and of the Oilseed & Grain News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at email@example.com.