With last week’s USDA report not bringing a lot of change to the table other factors are starting to influence and define the grain market in the short term. The Australian dollar has grown legs and is trading in the .75c to .76.5 US cent range. If we go back to the 1st of February the Australian dollar was trading at 0.7023 US cents. While the long term trend had been trending down this sudden surge caught most pundits off guard and has had a negative effect on current Australian grain values.
Weather patterns in the Northern hemisphere could be the next substantial driver of grain markets. There have been unconfirmed reports of below zero temperatures throughout the Kansas Plains growing belt and surrounding states. With grain in its early dormancy stage it is very susceptible to a late freeze. Similar scenarios throughout the Balkan states and the Black Sea could result in a production down grade. Expect choppy trade while these factors are being figured into the market.
Local export and domestic values have not been supported in the previous week. Growers holding grain on farm are having issues getting sales away mainly due to full capacity at local feed and packing houses. With patchy storms and rain forecast over the Easter period Lupin prices could come under pressure as well. The global balance sheet has been to the higher side for a long time and getting FOB sales away for Exporters has been extremely difficult with cheap grain being offered up from other origins and ocean freight being at an all-time low, causing Australia to loose its export advantage into Asia.
Expect trade to be quieter over the upcoming Easter period. If there are any price spikes over the short term look to price into these windows as buyer appetite may be limited. Finally all the best to an enjoyable Easter break and please be safe on the roads.
Chad Jefferis
