Futures dip hits cash market

This has propelled Winnipeg canola futures to new contract highs, with support flowing over to the Matif rapeseed contract that drives our canola pricing. It is also providing support for Minneapolis Spring Wheat futures, with a flow over to Kansas City Hard Red Winter wheat futures as supplies of high protein wheat become pressured.

However, that is where the support for wheat futures petered out at the end of last week, with the global benchmark Chicago Board of Trade Soft Red Winter wheat contract continuing to lose ground, with six trading sessions of lower closing prices, taking the value in $A terms down to $A306 a tonne on the December contract.

That is its lowest $A value since early April this year and is threatening the longest run for nearby futures above $A300/t since 2008. It has also pushed our new season cash market below $300/t delivered port ($325/t in WA) in most port zones this week as well.

Another factor at play in weakening global wheat prices is our own season. WA is being talked about as having the potential for a record crop. Good moisture levels in NSW should result in another good crop there, and rains in the forecast for this week in SA and Victoria should give the southern season a much-needed boost.

Australia could be on track for another big crop, and against big crops in Europe and the Black Sea, the threat to the spring crops in North America may fade into insignificance. It is certainly looking difficult for the market to return to the calendar year highs set in May.

Those growers with a well balanced forward sales program, and now looking at a big crop potential, are well placed to have a very good year at this stage.

However, many are now turning their thoughts to the practicality of harvest. Where will the much-needed casual labour come from? The broadacre cropping industries are very reliant on European, North American, and South American backpacker labour for heavy machinery operation during our harvest.

While the government has responded to the needs of the horticultural industries with schemes for Pacific Island workers to be able to come to Australia, any such schemes to assist broadacre farms seem to be forgotten.

Australia's grain industry is too big and too important for the government not to respond quickly to the pleas of our grower organisations on this issue.