Arable farmers may not be able to capitalise on strong grain prices as they struggle to get spring planting done.
In the North Island especially, planting is anywhere up to three weeks behind, with parts still too wet to get crops in the ground.
Growers in Manawatū, Taranaki and Waikato are reporting that only 40% of the region’s maize grain is planted.
Spot and contract maize grain prices across the regions are already reflecting tight supply with Waikato hitting $750 a tonne, while Manawatū is paying slightly more at $765.
The November NZX Grain and Feed Insight suggests the bottom of the south is more positive. Southland is having one of its mildest winters this year, setting the region up for successful winter crop growth and spring planting.
Growers there are expecting good yields with most crops already forward contracted.
But, while winter was relatively mild, they’ll need sufficient rain to support spring crops through the summer months.
There are concerns of a repeat of the dry after last year’s record drought significantly impacted the region.
Canterbury suffered a relatively wet winter with planting running behind for both winter and spring planting.
Irrigation is in full swing, a good sign that the season is underway and temperatures are lifting.
Feed wheat prices are holding up at $650 a tonne in Canterbury and $680 in Southland and Manawatū, while feed barley is at $760 in Manawatū, $650 in Canterbury and $680 in Southland.
While the winter was wet, it was the warmest recorded across the country and despite late and quite heavy frosts, cereal crops do not appear to have been affected.
Meantime, global grain supply for trade is on track for another bumper year but with Australian wheat yields now up in the air, the suspension of trade out of Eastern Europe and recent flooding and drought in the United States, there is now a high level of uncertainty in the global grain market.
Australia’s grain yields have taken a battering with wet weather failing to let up and the winter grain season now at risk of producing poor overall wheat yields.
The Australian wheat harvest is headed for a near-record for the 2022-23 season but excessive rain in Victoria and now New South Wales has affected the nation’s milling wheat harvest expectations.
Australia is set for a forecast production of 34 million tonnes according to the Australian Bureau of Agricultural and Resource Economics and Sciences. This is the second largest projected production year, set by last season’s 36.2m/t, which would have brought the nation’s total grain production to 61.9m/t.
With heavy rainfall reports by mid-October, there were already concerns around grain yields with crops sitting under water. By late last week and with rain still falling, concerns are only growing.
As expected with yield declines, future price movements have followed.
While global supplies have sat relatively positive towards the start of the 2022-23 season, recent news of trade blockades being reinstated out of Russia and Ukraine, as well as flooding in the US on top of a decline out of Australia, are all adding a level of uncertainty.
As milling wheat will be the most impacted by the wet weather in Australia, total feed wheat harvested will likely increase, putting further pressure on New Zealand domestic growers who have struggled with the competitive prices out of Australia over the past couple of years.
The International Rescue Committee (IRC) has referred to the consequences of the Black Sea grain trade deal suspension as “catastrophic” for countries experiencing extreme hunger. Agricultural strategists said the suspension is adding immense volatility to global grain prices.
As such, Chicago futures have risen over the past few days. Corn futures have also jumped.
