Market Morsel: Moist at the wrong time
Rainfall during October was very high throughout large parts of the wheat belt. This can be seen in our rainfall analysis (see here). The next 8 days rainfall forecast is set to have more falls, but it is not looking too bad.
NSW from 2015 to present provides a timeframe which encompasses a range of seasonal types, from wet, average to devastating drought.
In the chart below, the price of ASW through to H1. The grades which generally make up the bulk of harvest.
Dry season: The spreads from ASW to H1 tend to be minimal. The reason behind this is that buyers are not necessarily interested in quality. The majority of grain is destined for the throat of a beast, and access to supply is vital.
Wet season: The wet season causes an increase in lower protein wheat, which leads to scarcity of high protein. This leads to a widening of the spreads. At present the spreads are not yet showing the range that we experienced during 2016 – but it is still early days.