Grain Wrap | Know when to hold, or fold

When holding grain it is important to have at least a rough idea of your strategy in doing so.

HARVEST is finally behind us in southern NSW, bringing a conclusion to a frustrating cropping year that most will be happy to just rule a line under and move forward in hopes the coming season might be better. 

A dry and frosty growing season was very tough on crops, before torrential rain over the first weekend in December ended up affecting quality in the later maturing areas. 

Across the region as a whole, yields were about half the long term average, with results showing a clear downward trend travelling from east to west. 

With the reduced production being expected by the market, pricing was volatile right out of the gate as buyers competed to own early tonnage. 

Bids for wheat, barley and canola all hovered around the decile eight range when compared to the past decade and provided a decent selling opportunity for those who were in a position to commit. 

As harvest progressed, the typical pressure on prices came as buyers started to cover their immediate needs and grain volumes were realised to be in line, or even slightly better, than earlier forecasts. 

Canola was probably the hardest hit, maybe affected most by a global glut of oilseeds rather than any domestic factors. 

Current canola bids of $520 a tonne Port Kembla track represent a fall of more than $60/t from the peak seen back in November, a drop that has seen grower selling dry to a trickle as plenty choose to dig in and wait for a price recovery. 

Barley values have remained fairly steady, largely protected by continued strong demand from feed users. F1 grade barley in the Riverina has been trading about the $240/t ex-farm level and above depending on location (increasing the further north a parcel is located). 

Selling has remained fairly consistent as growers consider these values fair and it allows them to cover cash flow needs while holding over commodities for late sale. 

When holding grain it is important to have at least a rough idea of your strategy in doing so and some plan of attack for the situations that may see prices go up, maybe go down, or even remain the same. 

There are a wide range of products and methods available that can put cash in the bank, but still give exposure to the market. 

Some of these options will manage the final price for you but some others keep the ultimate pricing decision in the hands of the grower, so whatever your preference maybe, there is likely to be something suitable. 

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