Weather Archives | Grain Brokers Australia

Indian Ocean Dipole returns to neutral territory…

Posted by | Weekly Commentary | No Comments

Extreme weather conditions and unprecedented bushfires across many parts of the Australian continent have been dominating the news cycle over the past few weeks. The extent of the catastrophe and the tragic loss of human life has touched all Australians, and many across the globe.

While all this has been happening the weather phenomena that underpinned Australia’s warmest and driest year since records began has finally broken down, returning to a neutral state in late December after sitting in positive territory since July last year.

The Indian Ocean Dipole (IOD) is one of the key drivers of Australia’s climate. The IOD measures the difference between seas surface temperatures in the tropical parts of the western and eastern Indian Ocean.

It has three phases; positive, neutral and negative. The different phases impact rainfall and temperature patterns over the Australian continent by influencing the trajectory of weather systems to the south of the country.

Under a negative IOD phase the sea surface temperatures in the eastern Indian Ocean (off the northwest coast of Australia) are warmer than average, while in the western Indian Ocean the sea surface temperatures are cooler than average.

This usually results in above-average winter and spring rainfall over many parts of southern Australia as the warmer waters off the northwest coast deliver more available moisture to weather systems crossing the country. This is the most favourable phase for agricultural production in Australia, particularly in the southern two thirds of the continent.

A positive phase means that the sea surface temperatures in the eastern Indian Ocean are cooler than average with the opposite occurring in the western Indian Ocean. The result is an increase in the intensity of easterly winds across the equatorial Indian Ocean region pushing the warmer waters towards Africa. 

This generally means there is less moisture than normal in the atmosphere to the northwest of Australia, frequently resulting in less rainfall and higher than normal temperatures over Australia during winter and spring. The impact of a strongly positive IOD on agricultural production can be dramatic, as we have seen over the past six months. A positive IOD is also often associated with a more severe bushfire season in the southeast of the continent.

The latest positive IOD phase peaked in mid-October with a weekly index value of +2.2 °C, one of the highest readings since IOD records began. Since then the temperature gradient across the Indian Ocean has continued to ease. The latest value (for the week ending 5 January) is +0.17 °C, well below the +0.4 °C threshold for a positive IOD phase.

IOD events, whether positive or negative, generally end in late spring or early December, meaning the decline of the positive event in 2019 was much later than normal. This is tied to the delayed migration of the monsoon trough into the southern hemisphere and the accompanying changes to wind patterns over the tropical reaches of the Indian Ocean.

It is the monsoon’s interaction with the IOD that normally brings about the end of an IOD phase. The delay in the southern passage of the monsoon in late 2019 has meant the widespread drier and warmer than average conditions have continued well into the southern hemisphere summer.

The majority of global climate models are now predicting that IOD values will remain in the 0.0 °C to +0.4 °C range in the first half of 2020.

Meanwhile, most models of the El Niño–Southern Oscillation (ENSO), the primary climate driver in the Pacific Ocean, have it continuing in a neutral band until at least April of this year. The latest sea surface temperatures have cooled compared to the preceding two weeks, but they do remain warmer than average in the far western equatorial Pacific.

Under a neutral ENSO (neither El Niño nor La Niña) the trade winds blow as normal from east to west across the surface of the tropical Pacific Ocean. This brings warm moist air and warmer sea surface waters towards the western Pacific and keeps the central Pacific Ocean region relatively cool. 

A neutral ENSO generally means that its influence on Australian and global weather patterns is much reduced compared to El Niño or La Niña phases. With both the IOD and ENSO now in neutral territory we start 2020 with fewer impediments to more normal weather patterns. While this doesn’t portend the weather in Australia will change immediately, if the models are correct, it does take these two prevailing climate drivers out of calculations ahead of the next winter crop planting window

Weekly Strategy Update 13/02/17

Posted by | Grain Brokers Australia News, Misc, Weekly Strategy Market Update | No Comments

Wheat –  With CBOT wheat futures up 18 cents for the week, (or A$7 per tonne) we would have expected to see cash prices up week on week. However, the buyers pulled basis back 15 cents with grower selling targets being triggered. This was most evident on Friday with futures up 11 cents yet the cash price only pushing up about $1 across the board. Good news for those with Grain95! We would now be less aggressive in cash sales for wheat (with the exception of ANW1) with Thursday nights USDA report quite bullish and plenty of carry in the wheat futures market meaning traders will want to keep remaining long. If needing to sell for cash flow or feeling undersold, we believe Grain95 is the better move than selling cash at this stage.

Feed barley –  Is starting to look a lot tighter now with a heatwave hitting the eastern states severely impacting sorghum. Also a very heavy shipping program of barley out of Australia into Saudi Arabia and China is quite bullish. Similar to wheat, traders will want to remain long barley and to do that will need to ramp up buying of feed barley for this to happen. Currency will have a big influence on markets in the short term. We can’t see massive downside in barley so perhaps holding is a strategy to consider now.

Malt Barley –  The marketing window for malt barley is closing by the week. Have price targets in place as this is the best way to achieve your targets. Chinese buying interest should return following Chinese New Year’s celebrations but at what level is hard to gauge. Premiums should be $20 above feed for most malt 1 varieties.

17/18 Canola –  With rain forecasted across much of the wheat-belt this week, growers will look to getting some cover. Canola is the only grain to consider at the moment as it is at a decile 5-6 compared to other commodities still at about a decile 1-2. Planting expected to be up considerably due to pricing and early moisture so we suggest to get some cash sales cover at current levels.

Markets Focus on Supply Fundamentals

Posted by | Grain Brokers Australia News, Misc | No Comments

Last week we had the latest USDA report into US planted acres and grain stocks. While we expected some increases to US hectares for wheat and soybeans (we got them but not as big as expectations) it was corn that surprised the market. Corn has been well supported on the perception that it had lost out to bean hectares and not had the timing at the back end of the sowing window for the market to ‘buy hectares’.

US wheat was expecting a total area somewhere between 48 and 53million acres, USDA has reported 50.8m acres down on the 54.64m acre figure from last year but still above average area of 49.8m acres. US winter wheat harvest is adding to market pressure with growers in a selling mode despite a 7 year low in the wheat market.

Beans were expected to come in somewhere between 82 and 85.7million acres, the estimate came in at 83.7. Higher than predictions in March but lower than expected overall. With strong US sales continuing to be made US soy futures have been the light in the darkness for grains and oilseeds over recent sessions.

Corn was acres were expected to fall in a range between 92 and 94milliion acres instead the USDA gave the market an additional 500,000 hectares over the March estimate, coming in at 94.1m acres. Coupled with stocks that were again above the upside expectation, at 4.7billion bushels vs 4.6billion and corn was hit hard on Chicago futures markets last week.

With wheat and corn competing for a share of feed markets the big interruption to corn markets has sucked wheat into the downdraught somewhat. We are now looking globally at a two speed wheat market, with very cheap general purpose wheat eroding values. However we are seeing demand pick up for the lower, cheaper grades and this will eventually be the solution to oversupply though it will take some time. Holding onto physical old season wheat does not look to be a rewarding exercise from here on in. Grain Brokers can discuss a number of alternatives on this front so please contact one of our brokers at any time.

Countryman 17/5/16

Posted by | Grain Brokers Australia News, Misc | No Comments

It is great to see such a positive start to the season for most across WA with solid early rains seeing the first fully wet plant in some time. Let’s hope this continues throughout the season and those in the north can pick up some solid rains to get them up and running with the rest of the state.

Old season pricing has been unusual to say the least over recent weeks with basis remaining strong in all port zones (and strengthening in Kwinana) despite futures strengthening and our dollar weakening against most other major currencies. This is contrary to the general belief that basis will weaken when international prices rise in Aussie dollars.

With shipping slots being pushed back towards the back half of the year and many being cancelled, it is hard to see how basis can continue at these levels with such a large wheat carryout expected. Further to this, we are seeing a strong inverse between old and new crop pricing in WA despite there still being considerable carry to the forward contracts in the Chicago, Kansas, Minneapolis and even Matif wheat exchanges. This should signal alarm bells that old season local wheat prices are overvalued or new season prices are undervalued. If you are holding a large proportion of your old season wheat, this is the type of scenario you will want to avoid.

Pricing out old season crop over the short term is the simplest strategy but for more information on the above or to see how Grain Brokers can add value to your business, please don’t hesitate to call one of our team.

Weekly Report 24/3/16

Posted by | Grain Brokers Australia News | No Comments


Corn prices have traded above the crucial support of US$3.60. March 16 CBOT corn futures settled the week at US$3.684 per bushel.

Chart 160324 WR1






Argentine maize production is forecast to hit record highs this season, according to the latest estimates from the Argentine government on Wednesday. At 37 million mt, the latest estimate is well above the current USDA forecast of 27million mt and much more than the Buenos Aires Grain Exchange’s estimate of 25 million mt. The government have put the step change in maize production expectations down to a surge in late maize planting


China, which has been a key market for barley over the past two years, continues to display a trend of ever decreasing grain imports. China imported 261,000 mt of barley in February, the lowest monthly barley imports in 15 months.

Chart 160324 WR2








Chicago May-16 soybean rallied and settled at 905.2 US¢/bu on Thursday, the sharp rise owing to stronger trade data.

Chart 160324 WR3







Canola followed the oilseed market and ICE Canola March 16 finishing at CA$470 up CA$4.52/t for the week.

Chart 160324 WR4






Argentine soyabean output was pegged at 60.9 million mt by its government in the first official estimates of the season. This is above both the latest estimates from the Buenos Aries Grain Exchange at 58 million mt and USDA at 58.5 million mt. Harvesting has just begun in the country, with 1% cut by 23 March.

Chinese imports of soyabeans are running ahead of current forecasts this season, with further growth predicted for 2016/17. So far this season (Oct-Feb), China has imported 32.2 million mt, up 8% on the same period last season and ahead of the 5% growth rate the USDA expects in 2015/16 as a whole. Imports are predicted to grow by a further 3Mt in 2016/17 by US attachés – read more here. Higher Chinese demand could help soak up some of the global record crops expected this season.

Chart 160324 WR5







to read the full report click the below link.

Weekly Report 16_03_24


Weekly Report 5/2/16

Posted by | Grain Brokers Australia News | No Comments


March 16 CBOT corn futures closed higher at US$3.68 per bushel up 3.0 Usc/bu for the week.

Chart 160205 WR






Brazil’s corn forecast was increased by 1Mt to 83.3Mt in January by CONAB. Exports of corn were also revised up and are expected to reach 29Mt, with high demand due to weak local currency. The lower Brazilian Real supporting local farmers to sell to the export market not the domestic end users.

Informa has raised the Argentine corn crop forecast to 26 million tonnes up 4 million tonnes from their previous estimate of 22 million tonnes.

South African grain association – Grain SA has lowered their initial estimate of corn imports from 5 million tonnes to 3.8 million tonnes.

Barley prices are also lower over the week against reflecting a lack of demand and the firmer AUD.







The Aussie traded at the 72¢ this week for the first time since early January.

The Reserve Bank has left interest rates unchanged at their February 2016 meeting.







BOM forecasts rainfall is more likely to be above average across much of the southern half of Australia with the strongest probabilities in the southeast over the next 3 months.






To read the full report click the below link.

Weekly Report 16_02_05

Weekly Report 6/11/15

Posted by | Grain Brokers Australia News, Misc | No Comments


CBOT Dec 15 futures finished the week at 526.3USc/bu. An 11.30 USc/bu rise week on week.

Chart 151106






Chicago December wheat futures managed to close just above its’ 200day moving average, a bullish technical signal.

Once again dryness in Ukraine, Russia and the US combined with harmful harvest rain in Australia cited as reasons for futures pushing higher

The Ukraine government is suggesting up to 20% of their winter wheat crop will not survive the lack of rainfall and will need to be reseeded in the spring. According to UkrAgroConsult, a little more than 14 million acres of wheat will go into the ground in Ukraine, a similar acreage number to 2006, when just 16.5 million and 13.8 million tonnes of wheat was taken off, respectively. However, analysis think that the 2016/17

Ukrainian wheat crop could yield closer to 19 million tonnes. Only 55% of the seeded wheat crop (or about 8.7 million acres) has emerged, and only 69% of fields were in “good or satisfactory” condition.

In Russia, the Ag Ministry reported that at least 25% of their fall-seeded crops are in poor condition due to a lack of rain, and 92% of the planned acreage was in the ground at the end of October. A harsh winter would result in re-seeding in the spring with something other than wheat.

US winter wheat 88% planted, up 5% but Good to Excellent only rated 49% up 2% from last week. This time year at 59%

France’s winter wheat 78% planted.

India have planted winter crop on 8.40 million hectares so far this year- down 3.8% from a year ago due to dryness.

Local pricing has followed the offshore market with Kwinana and Geraldton at the $300 mark.

Chart 151106.2





To read the full report click the link the link below.

Weekly Report 15_11_06

Weekly Report 30/10/15

Posted by | Grain Brokers Australia News | No Comments


Wheat CBOT Dec 15 futures made positive gains for the week, and finished at

515USc/bu. up 24.4USc/bu week on week.

US wheat prices traded higher this week as better than expected export sales came amid forecasts for more rain in the winter wheat areas, and as fund participants sparked a round of buying.

The USDA has lowered Australia wheat crop estimate to 24 million tons

We continue to monitor the northern hemisphere crop progress, as the market is very sensitive to any developing production concerns.

The US winter wheat is currently at 83% planted up 7% from last week. The first condition rating was also released, the good/excellent score was 47%. This is the lowest rating in 3 years and well below analysts’ expectation for 55%.

Weather 151110







The extreme weather map shows that large areas of Italy and eastern Europe experienced abundant rains. In Eastern Europe, the excessive rainfall hampered the sowing of winter crops.

In Poland, dry conditions have persisted since summer. The winter crops sown in September therefore germinated under unfavourable conditions which further worsened due to the low temperatures that occurred in October. Similar problems occurred in the Baltic countries, especially Lithuania. In Ukraine and Russia. Reports out of the Black Sea are suggesting 50% of the winter wheat is rated in poor condition. This story is unlikely to play out until the northern hemisphere spring.

The Russian wheat plantings pace is at the 5yr average, however in Ukraine continues to lag and is about 12 to 17 days behind where it should be and is at 82% complete.

Local pricing has followed the offshore market higher this week making gains of $ 6-9 across all zones. However the full extent of the gain has not been passed along, as basis continue to slide.






To read the full report follow the below link.

Weekly Report 15_10_30


Check you're getting the best value from your grain marketing. Test Our Grain Prices