Australia: Beneficial rains across key barley regions boost crop forecasts
Beneficial rains fell across key barley regions in Australia adding to an already good crop situation. In addition, dry areas in New South Wales received moisture. As a result RMI Analytics’ barley crop forecast for the nation is increased to 10.45 mln tonnes, up 0.3 mln from last month.
The El Nino risk during the remaining crop development offers some caution about the final crop 2023 potential, the analysts warn. This leaves the market with two main scenarios:
1. Good conditions continue and an average crop result is achieved;
2. The anticipated dryness in the coming months reduces yields and the final result is fair (even poor).
At the moment, there is more rain in the forecast for this week, and in particular more for New South Wales. If these rains are realized, the pendulum would swing in favour of scenario 1 above, with a greater likelihood of a good result due to favourite soil moisture levels plus in-season rains.
Australian prices are steady to higher in a market rather hard to define at the moment. A final answer to the Chinese tariff is expected by the end of June but this process has been extremely slow. In the meantime, the market appears to be preparing for this expected outcome with feed prices firming in anticipation of China’s demand for FAQ barley (germinating feed barley). In addition, domestic feed markets are strong as the dried areas in the northern areas of the east coast is where substantial feed demand resides.
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