East coast prices ease on forecast rain and global weakness

Weather forecasts have been predicting widespread rain across large swaths of the eastern states' cropping regions for more than a week. An upper-level trough is already triggering rain across western NSW and parts of southwestern Queensland with more rain expected in the coming days.

Further rain is expected across southern Australia when a cold front pushes into southeastern Australia early this week. The same weather system resulted in heavy rains across parts of WA, with the wintry system expected to bring widespread rain and storms across parts of SA, Victoria, and southern NSW.

Dry weather concerns have been pushing Australian wheat values higher in recent weeks but some of these gains were given back last week. This has seen Australian prices moving higher while global benchmarks have been moving lower in response to further declines in Russia wheat export values.

East coast grain values were broadly softer on the prospects of rain. ASX wheat futures fell $12 a tonne to $384 on the back of the rain. Cash markets in southern Queensland and northern NSW remained well supported last week despite the softer tonne in ASX futures and southern markets.

Barley prices of $430 delivered into the Darling Downs are drawing supplies from southern NSW. Traders are saying the cheaper road freight rates as the bulk shipping programs slow, is helping to draw more grain into the southern Queensland feedlots.

But crops don't grow on forecast rain. Grain buyers will pay close attention to where the rain falls, with most models predicting lighter rain for some of the driest areas.

East coast farmers will welcome this week's forecast rain, but farmers across northwestern NSW are sweating on it. The region accounts for around 40 per cent of the annual NSW wheat plantings in a normal season, amounting to more than 3 million tonnes of wheat production based on average yields.

Northern grain supplies are seen as relatively tight after the excessive rains cut production coupled with the robust 2022-23 wheat export pace from Queensland and NSW. Large carry over stocks from the big NSW crops in 2020 and 2021 are now seen as nearly depleted.