Market Insights: Planting Updates and Price Pressures

By Chris Johnson

1^st July, 2024

The end of last week saw the market overloaded with information, with planted area updates from Stats Canada and the USDA’s Stocks and Acreage Report released just 24 hours apart. US wheat and soybeans hectares where below the previous planting intentions release at the end of March by approximately 165K Hectares each, while planting increases for Corn (+582K Hectares) and Cotton (+404K Hectares). These increases more than making up the deficit from wheat and soybean plantings. There was a reasonable soybean and corn area still to plant as at the completion of the reporting window, so those areas are still subject to change. Canadian planted wheat area was reported lower year on year at 10.7M hectares (total wheat), with spring wheat down 2.8% and winter wheat down 5.8%, losing hectares to durum with its plantings up 5.5% at 2.59M Hectares. Canola plantings were up, coming in 243K hectares over the 5-year average at 8.9M hectares., while Soybean area also rose to the highest planted area since 2018 at 2.3M Hectares. 

Locally planting is all done bar the shouting for canola, wheat and barley across most of the country. Plenty of fertiliser had been spread ahead of last weekend, with many choosing to apply after establishment, rather than putting down with the seed at planting time. The planters were busy around the bottom of the Liverpool Plains last week ahead of the rain on the weekend trying to get it finished. Chickpea planting is still ongoing, with prices remaining firm, growers are keen to chase the available moisture in paddocks recently harvested for sorghum. Some late opportunity crops, like short season barley are still on the table, but with profiles full to brimming in the north, those paddocks may well be held over for an early sorghum or dryland cotton plant.  
  
Prices for Wheat and Barley delivered the Downs feedlots has continued to slide, and delivery periods have pushed out to August/September. Both traded below $390 last week, and with adequate supply still available and the prospects for the coming crop in QLD and Northern NSW only improving day to day, there is likely more downside pressure on prices, as we see additional sellers coming to market from the start of this week/new financial year. The new crop market hasn’t been awash with either buyers or sellers, but there has been the occasional parcel being forward sold at current prices. 

The slow and steady sorghum harvest is inching closer to finishing, with only a few hectares left to be harvested. Prices have continued to slide lower, trading below $350 Downs last week. Downward pressure on cereals, will pressure sorghum prices lower if additional export demand cannot be found, and sorghum needs to make its way into the domestic feed homes.

While much of the canola in NSW couldn’t be growing in any better conditions, the VIC/SA and WA crops are in definite need of a drink to keep crops from running out of steam, with many having only emerged on the limited moisture provided by recent rainfall events. Seller of old and new crop aren’t overly enthusiastic at current prices, preferring a wait and see approach to selling at the moment.