Rural Bank says below average July rainfall fell across most grain regions and this has put further stress on crops in northern New South Wales and southern Queensland.
Crops continue to develop well through southern New South Wales, Victoria and South Australia. Western Australia remains a mixed bag as dry conditions are developing in the state's northern regions while production prospects in the south remain strong.
Rural Bank's wheat production estimate of 27.9 million tonnes is unchanged from the previous month with yield cuts in northern NSW offset by increases in southern NSW, Victoria and South Australia.
Rural Bank noted wheat exports have maintained record pace all season with the final export figure estimated at 30.7 million tonnes. The pace is expected to drop off in the final two months as the domestic market starts rationing grain due to ongoing dryness concerns.
Domestic grain trans-shipments to Brisbane have resumed for the first time since 2020. Feed barley shipments from WA are helping relieve tightening old crop supplies in northern domestic markets, according to Rural Bank.
Globally, July was a volatile month for grain prices due to geopolitical tensions and weather concerns, Rural Bank says.
Prices increased in late-July after Russia's attack on Ukrainian grain infrastructure. Increased supply concerns out of the Black Sea region rattled markets. Dry weather across the United States and the European Union also lent support to prices.
Rural Bank expects the price volatility to continue into August. The weather in the US is still in full play with spring crops in critical development stages. This is combined with a resumption of attacks on Ukraine export infrastructure which has potential to see prices surge again.
The Rural Bank August Insights report can be viewed here: https://bit.ly/3s7KZmm
