Global grain prices have pushed lower in 2024 on the expectation of reasonable crop production from the major exporting countries. The coming months will determine if this eventuates.
The northern hemisphere spring is taking shape and grain markets have been yearning for some information around how weather and crop conditions develop.
Winter wheat crops have emerged or are emerging from dormancy, and spring crops such as corn, soybeans, spring wheat, barley, pulses, and oats are still to be planted.
This means weather conditions between now and June will have a significant bearing on global supplies and prices, which impacts Australian prices.
At the end of March, the United States Department of Agriculture released its estimates on US crop plantings with corn below market expectations and down 5 per cent year-on-year.
More crop reports in the world's major exporters are being released, as analysts provide an indication on what they think will get planted and the condition crops are in.
The USDA released its first crop condition rating last week on the state of the US winter wheat crop since it emerged from dormancy.
Of the US winter wheat crop, 56pc was rated good-to-excellent which compares to 34pc this time last year and the five-year average of 46pc, according to Profarmer Australia.
Hence it can be inferred the crop is in pretty good shape, which may help to offset the USDA planting report that put US winter wheat plantings down 7pc from last year.
US corn plantings were estimated at just 2pc complete. Soybean plantings had not yet begun.
In France, their soft wheat conditions were rated at 65pc in good-to-excellent condition, which is significantly lower than last year's rating at 93pc good-to-excellent.
Dryness through parts of eastern Europe and the Black Sea grain areas are being reported along with wet conditions in western Europe.
It's too early to know how much grain will be produced in 2024. Grain markets are trying to "guess" what will happen and price it accordingly.
There will be plenty more reports on weather and crop conditions in coming months and you can expect prices to move in reaction to those reports as market participants guess the impact.
As it stands, global grain stocks are relatively tight, speculators hold record net-sold positions in Chicago Board of Trade corn and soybeans, and consumers have reportedly been buying hand-to-mouth.
The scenario may lend itself to some possible upside in price if there is adverse weather or the Ukraine conflict escalates.
In Australia, grain prices have maintained their recent general improvement with buyers seeking some coverage and growers holding firm on price targets to sell.
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