Australia: Profits set to increase in grain even as prices fall

Grain prices have dipped alarmingly through the start of the new year, with Australian wheat prices hitting two year lows and global prices falling even further, to three and a half year lows, but a closer analysis reveals it is likely to be a better year for Australian grain growers on a gross margin basis. Rabobank Australia grains and oilseed senior analyst Vitor Pistoia said while values had come back due to good supplies, particularly out of Russia, and greater confidence in the ability of grain to be able to be moved from the Black Sea region there were reasons for optimism for Australian growers. "Prices have come back, but crop inputs costs have come back by more, so the ability to produce good gross margins per hectare is actually improved, in spite of the price drop," Mr Pistoia said at last week's Wimmera Machinery Field Days in Victoria. Last week Australian port prices pushed down as low as $260 a tonne in the Kwinana port zone for benchmark APW quality wheat before ...