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

Grains, Cereal & Legumes

Australia

Market & Price Trends

Published Mar 15, 2024

Tridge summary

Despite a drop in grain prices, Australian grain growers are expected to have a better year in terms of gross margins due to a decrease in crop input costs. Rabobank Australia's senior analyst, Vitor Pistoia, highlighted that the demand for vegetable oil remains strong, benefiting canola, and pulses are an exciting space to watch for Australian growers due to poor crops in India and dryness issues in Canada. The article also emphasizes the significant impact of weather conditions on market prices, suggesting that weather can be a major determinant of price setting in certain markets.

Disclaimer: The above summary was generated by a state-of-the-art LLM model and is intended for informational purposes only. It is recommended that readers refer to the original article for more context.

Original content

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 ...

Source: Farmweekly