Feed grain price update and winter crop outlook

For the first few weeks of June, wheat delivered Darling Downs averaged $401/tonne, up 48% from the same period last year, while barley increased 60% to $406/tonne (Profarmer). Wheat delivered Goulburn Valley was 50% higher year-on-year, averaging $322/tonne in June so far, and barley was up 62%, to $307/tonne.

Winter crop outlook

ABARES have released their winter crop outlook for 2018-19 – a quarterly report that assesses crop condition and the forecasts of area, yield and production for Australia’s major field crops.

The beginning of the 2018-19 winter crop season varied across the country. Rainfall during autumn was mostly below average, although cropping regions in WA, SA, Victoria and southern NSW received some well-timed rainfall in May, which assisted sowing of winter crops. Most cropping regions of Queensland and northern NSW, however, remained dry – hindering planting in these areas. At the end of autumn, lower layer soil moisture across most cropping regions were ‘below’ to ‘very much below’ average – meaning adequate winter rainfall will be critical for crop development.

According to the latest three-month rainfall outlook from the Bureau of Meteorology, WA has an approximate 50% chance of receiving average rainfall during winter, while the south-east mainland is likely to be drier than average over the outlook period.

The total area planted to winter crops is forecast to be 4% lower overall, to 21.1 million hectares – due to decreased areas across NSW, Queensland and WA. Higher prices for cereal feed grains, compared to oilseeds and pulses, are likely to see a greater area planted to barley, and a reduction in area planted to canola and legumes.

ABARES report that the area planted to wheat is forecast to ease 2%, to 12 million hectares, while the area to barley is predicted to grow by 10%, to 4.3 million hectares.

Assuming average winter rainfall arrives, winter crop production is expected to be down slightly to 37.7 million tonnes. Wheat production is forecast to lift 3% to 21.9 million tonnes and barley is forecast to increase 3% to 9.2 million tonnes. Offsetting these increases, canola production is predicted to be 16% lower, at 3.1 million tonnes, chickpea production is expected to decline 40%, and oats production is forecast to remain similar, at 1.1 million tonnes.

Information:

For more information on the ABARES winter crop outlook, visit the ABARES website.

Read our previous feed grain price update.