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Signs Good for Barley, Canola

10 November 2011

AUSTRALIA - Harvest has begun and the weather this week is shaping up as critical for quality and access to important markets.

The spring weather appears to have worked in favour of barley growers reports Weekly Times Now.

Early crops of Mallee barley stripped around Ouyen have been achieving the malting grade, suggesting protein levels have been moderate to low.

Barley crops around Hopetoun are yet to be stripped.

Malting barley prices are quoted at $225 a tonne delivered to Victorian ports, similar to the prices last week. Growers and the grain trade are yet to see how this soft finish of cool conditions has affected quality.

Protein levels are critical to achieve the $25/tonne premiums for H2 over the base APW prices. Forecast rains could bring with them some reduction of quality or at least a delay to harvest. Fortunately no significant rain is forecast in the foreseeable period.

Rain in Australia or its potential has growers and grain traders on edge. Wheat traders in the US have been watching developments in the start of the harvest in Western Australia. Growers in the Geraldton region have noticed reduced falling number readings on their first samples of wheat tested at silos.

Canola harvest is significant this year with the potential for over 2.5 million tonnes nationally. Industry estimates for Victoria are for a 570,000-tonne crop, 26 per cent higher than last year. The area sown to canola in the Riverina and Mallee is consistently higher this year and growers have been active sellers.

Unlike cereal grain prices, canola prices have remained similar or better than the corresponding prices at harvest last year. Canola prices quoted at the start of this week were $538/tonne delivered Melbourne post basis, $7 higher than last week.

Early reports on harvested canola have been favourable with oil contents between 43 and 44 per cent. However some yields have been disappointing as a result of patchy crops from earlier mice damage.

International grain markets continue to be strongly influenced by the gyrations of the financial turmoil in Greece and how this affects investors' willingness to trade risky commodities such as grains.

Australian wheat futures markets were active on Monday, trading more than four times the daily volume.

Traders consider this activity was due to traders and farmers re-establishing their positions on the ASX futures market following the collapse of the grain futures broker and trader MF Global.

The US parent company MF Global Holdings Ltd applied for bankruptcy protection last week. Correspondingly MF Global Australia Limited has been placed into voluntary administration.

TheCropSite News Desk



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