High dollar hinders crop sales

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A SOARING Australian dollar has resulted in lower prices for both old and new-crop grains and oilseeds.

Last week, the London-based International Grains Council reported the world was expected to produce an extra 8 million tonnes of wheat in the 2011-12 season.

This is higher owing to better crops in the Black Sea region.

Larger supplies are also expected in India, Iran, the EU and the US.

The Ukraine grain harvest is just over half way along and production forecasts are predicting more grain than expected.

Similarly, Russian wheat-crop estimates were increased last week as higher yields materialise in their harvest.

As these exporters aggressively sell grain, the correction to world wheat prices continues.

Last week, Egypt bought Russian wheat for US$40 less than the nearest competing supplier.

The fears of the US Government being able to raise its borrowings to meet its debt obligations triggered a lower US currency and, correspondingly, lifted our dollar to US110c.

Old-crop AGP wheat prices are $10 a tonne lower this week, to $192/tonne delivered to Victorian ports.

However, F1 feed barley is $2/tonne higher, at $209/tonne delivered to Victorian ports.

These barley prices are supported by some exporters needing to complete their shipping programs.

New-crop canola prices are down $10/tonne this week to $548/tonne delivered to Victorian ports.

Canola has been pressured by cooler weather and higher soybean crop prospects in the US.

With last week’s rainfall in the cropping belt of southeastern Australia at less than 5mm, many growers are questioning grain sales.

Those growers who can afford to continue holding grain will do so as a hedge to the declining state of their crops.

This is certainly the situation for many growers in the Mallee.

While early-sown crops around Ouyen are well established and face good yield prospects, heavier soils on properties between Birchip and Boort are struggling.

Further south, between Rupanyup and Glenorchy, crops have fared better and have been receiving 10-15mm each time it rains, compared with 2-3mm in the Mallee.

However, Mallee growers say their crops are just one good rain away from some good growth and early yield potential.

These deliveries have been assisted by increased availability of trucks and lower freight charges.

The approaching grain harvest in the northern hemisphere signals the start of the end of Australia’s competitive marketing window.

As there are fewer bulk vessels now loading grain, there are more road trucks available for domestic grain deliveries.

Road freight rates had been held up as much as $10/tonne higher for a freight task than the normal cost.

source:  weeklytimesnow.com.au

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