World market good news for grain growers

World market good news for grain growers

Cropping
There is a solid outlook for global wheat prices based on solid demand for all grains, especially from China.

There is a solid outlook for global wheat prices based on solid demand for all grains, especially from China.

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There was good news for grain producers in last week's USDA WASDE report.

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LAST week's US Department of Agriculture (USDA) World Agricultural Supply and Demand Estimates (WASDE) report was good news for Australian farmers, many in the midst of a bumper harvest.

Rabobank analysis was that the report was bullish for soybeans and corn and slightly bullish for wheat and cotton.

For Australia's most important crop, wheat, there was little news from within the complex, apart from a slight ratcheting up of demand from China, but the spin-off from the strong fundamentals in soy and corn are set to increase demand.

Rabobank analysts said they felt the increase to Chinese imports, which would mark the highest amount of wheat the Asian giant has brought in since the mid-1990s, was on the high side, but added if corn and soybean prices continue to rally wheat imports would continue to become more attractive.

Yield cuts in soybeans have now brought ending stocks to low level, with the USDA cutting yields in the US by more than expected and also slashing tonnage from the important Argentine crop.

There is strong front loaded export demand for US stocks, mainly from China where soymeal is critical in feeding pigs.

The spin-off from the strong soybean sector will influence the entire oilseeds complex so Australian canola producers can look forward to a continuation of the current high prices, which are at decile 10 levels at present.

Corn saw massive cuts to US ending stocks and the USDA also acknowledged the massive demand that has sprung up in China in recent months.

Rabobank said that a poor Chinese plant, with issues with typhoons, combined with dryness in Ukraine meant the outlook for corn and all other feed grains right through 2021.

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