Rural Bank June Insights update

The June update provides an analysis of production and pricing trends for Australian broad acre farmers.

Commodity overview

• Seeding of the 2023/24 winter crop has wound up across most of the country with mostly good germination and crop establishment. However, some parts of northern New South Wales still remain dry.
• International wheat prices remained under pressure over the past month on improving global supply prospects.
• Local prices showed more resilience as May turned dry and domestic buyers entered the market to try and secure wheat offered up by growers.

Seeding of the 2023/24 winter crop has wound up across most of the country. Historically this is an early finish which reflects widespread rains in March and April that allowed many growers to make an early start. Germination and crop establishment has mostly been good. Although conditions in parts of northern New South Wales are one major region which remain patchier.

ABARES released their Australian Crop Report for the 2023/24 season recently. The area planted to winter crops in Australia is forecast to fall but remain historically high in 2023/24. Plantings at 23.3 million hectares would be six per cent above the 10-year average. Wheat production is forecast to fall by 34 per cent to 26.2 million tonnes, slightly below the 10-year average. Barley production is forecast to fall by 30 per cent to 9.9 million tonnes, around 11 per cent below the 10-year average. Canola production is forecast to fall by 41 per cent to 4.9 million tonnes, around 15 per cent above the 10-year average.

Strong export demand for wheat continues to be underpinned by China for a second consecutive year. Wheat exports to China to the end of May were 5.8 million tonnes. With four months of the marketing year to go, last year’s record of 6.1 million tonnes will be easily surpassed.

International wheat prices remained under pressure over the past month. Large crop forecast in the European Union and Russia along with good conditions in Argentina and improving conditions in Canada are all pushing up global supply prospects. Local prices showed more resilience with price gains of A$5-11 per tonne across all port zones. Dry conditions during the month saw domestic buyers enter the market and try to secure wheat offered up by growers. A falling Australian dollar along with some shorts in the export market also helping shore up local prices.

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