Grain price: Drought to hamper planting in southern hemisphere?

The grain markets aren’t moving anywhere fast and continued with recent form this week. Weather events could play a big part in price next harvest and with that in mind, AgriLand is watching out for any events that may affect the market.

In Australia, hot and dry weather is being forecast for the coming months, particularly in the western part of the country.

Australia – the fourth largest exporter of wheat in the world – has been badly affected by drought in recent years.

However, grain yields in Western Australia fared out well in the season gone by and actually weren’t far off a record harvest. The region provides a large proportion of the country’s grain harvest.

Weather reports are now suggesting that Western Australia only has a 20% chance of receiving average rainfall from February to April.

April generally marks the beginning of the planting season in the region. Temperatures are also expected to be above average across Australia.

That dry weather will also play a role in maize yields in Brazil. The second maize crop is likely to be affected by low soil moisture contents.

An increase in maize price, as a result of reduced yields, could help improve demand for feed wheat and barley closer to home.

Also in the southern hemisphere farmers are getting stuck into the wheat harvest, but no reports on yields were available to AgriLand.

LIFFE

LIFFE wheat for March was steady all week. It stood at £170.00/t (€193.55/t) at close of business on Monday (January 28) and dropped slightly during the week to land on £169.35/t (€192.81/t) on Friday (February 1) morning.

MATIF

MATIF wheat for March dropped towards the end of the week. It opened at €205.00/t (Monday, January 28), increased slightly to €205.75/t on Tuesday and Wednesday (January 29 and 30) and fell back to €204.25/t on Thursday (January 31). By Friday morning (February 1) MATIF wheat for March was at €203.50/t.

CBOT

Chicago Board of Trade (CBOT) wheat was as exciting as the previous two prices. On Monday it finished at 518.75c/bu (€166.31/t), dropped to 513.25c/bu (€164.39/t) on Tuesday and hopped back up to 516.50c/bu (€165.66/t) on Thursday.

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