Market Morsel: Chasing headers

Market Morsel

In a few short months Australia will be harvesting its bountiful crops. The harvest will be a welcome relief from the previous years, but we are the last to harvest.

Agricultural analysts often discuss the northern hemisphere weather market. This is a period when the majority of volatility in the marketplace occurs, usually between June and August. In general, the sentiment and price for the year primarily are set during this period.

Why is that the case? The reason for the importance of the northern hemisphere on setting prices is due to the production. The majority of the world’s landmass is in the northern hemisphere, and this is where the bulk of grain is grown.

To display this clearly, I have worked out how much of the worlds wheat is harvested each month. When the rest of the worlds headers go to sleep, that is when ours awaken.

If there are northern hemisphere production issues, then they can impact on larger volumes of the worlds grain production.