Opinion

Wheat producers face the great divide

IN FOCUS: NAB’s director of commodities, Tim Glass, will be a keynote speaker at the upcoming Optimising Gain from Grain forums.
IN FOCUS: NAB’s director of commodities, Tim Glass, will be a keynote speaker at the upcoming Optimising Gain from Grain forums. Contributed

IT'S a season of stark contrast for Australia's wheat growers, with those in the west and south set for a bumper season while those here in the east are doing it tough.

The current situation highlights how what's happening next door isn't necessarily going to be driving prices.

Producers in large areas of New South Wales and in northern Victoria have been hit by two frost events on top of a dry start in the north - the latest frost having a severe impact on wheat crops across some 1.7 million hectares.

While farmers in the east would have expected this to boost the price by tightening supply, it's actually softening on the back of large exportable surpluses in Western Australia and South Australia, where the wheat crop is forecast to reach 15 million tonnes. International factors are also having an impact, with Canada this year producing one of its biggest wheat crops on record.

While many growers will sell at harvest to meet cashflow needs, there may be a rally in the wheat price post-harvest, if seasonal conditions don't improve in this region.

This means all eyes are currently on northern NSW and southern Queensland, where six inches of rain are needed in the next six weeks to lift soil moisture profiles high enough to allow growers to plant sorghum.

If there's no rain prior to Christmas, there's every chance the price of wheat will rise early next year due to a lack of feed grain in the system.
 

Topics:  commodities nab agribusiness wheat


Stay Connected

Update your news preferences and get the latest news delivered to your inbox.