Strong demand for Aussie grain says CGX

ABARES released its December Agricultural Commodities report and the United States Department of Agriculture (USDA) released its monthly World Agricultural Supply and Demand Estimates (WASDE).

ABARES confirmed it expected the 2022/23 winter crop to be the second largest on record at 62.025 million tonnes, compared to last year's record of 62.967mt.

Australian wheat and canola production was forecast to hit new records at 36.567mt and 7.33mt respectively.

Barley was forecast to fall by 500,000t year on year.

The USDA WASDE also revised its estimates and adopted ABARE's production numbers for Australia.

The other major changes were the USDA decreasing Argentinian production and increasing Russian production.

Most private analysts believe these revisions were too conservative, Argentinian production should be lower and Russian production should be higher.

A key statistic for the market to watch is the ending stocks estimate for the world's major wheat exporters.

While there was a lot of wheat produced and consumed globally, countries like Australia that produce far more then they consume play a significant role in influencing world prices.

Stocks held by the major exporters were projected to be about 53mt, which is down 5mt from last year.

Less grain available supports prices.

Some wheat traded in international physical markets last week with Egyptian private buyers purchasing 260,000t of Russian wheat at an equivalent price of $445/t FIS WA and $425/t track port on the east coast.

South Korea purchased 60,000t of feed wheat, presumed to be supplied by Australia, at equivalent prices of $457/t FIS WA and $435/t track port on the east coast.

China also purchased 60,000t of US soft white wheat at equivalent prices of $475/t FIS WA and $455/t track port on the east coast.

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International trade activity and the projected stocks of exporters to be sold on the world market show that Australian grain does not need to get cheaper to be internationally competitive.

Locally, Australian grain prices remain under some harvest pressure, although last week there were signs of prices stabilising.

There is strong demand for Australian grain.

Buyers want to participate in buying Australian grain and there is still a lot to be bought for export and domestic use.

Growers have a say in what price grain trades.

Offer your grain for sale at a price rather than hitting cash bids.