SOIL conditions, as winter wheat crops in the northern hemisphere emerge from the winter snow cover, will be important during May.
Whatever happens to US crops during the thaw will affect grain prices for both old and incoming Australian prices.
May is an influential month on the Australian wheat calendar for this reason.
But more than 50 per cent of the wheat harvested in Australia from last season was downgraded to feed-grade. Feed-grade wheat is not usually bought for human consumption, but is traded as an animal-feed ingredient.
The east coast Australian feed-wheat surplus, means this wheat is going to be exported via the licensed wheat exporters.
The main feed grain traded through the world is corn, sometimes referred to as maize.
Feed grades of wheat are priced to displace corn in the feed rations of north-east Asia and Pacific rim countries.
The US produces 40 per cent of world corn and dominates world trade in this commodity.
Thus, Victorian and other south-east Australian winter crop growers this year need to follow the market fundamentals for corn, as well as the issues that impact directly on human consumption wheat.
Northern hemisphere countries grow their corn in the more southerly regions, with spring wheat crops sown further away from the equator, and later in the year.
Weather conditions during April in southern areas of the US will affect anticipated corn yields and the balance between soybean and corn plantings.
Every US rain event, or extended period of no rain through next month, will impact on corn prices, and hence feed wheat prices.
Developments in Libya and other Middle East countries over this period may add to the grain market volatility, as will any tardiness in repairing the Japanese nuclear reactors.
Bidding is strong for specific milling grades of wheat for fobbing through Geelong or Port Kembla. Feed barley prices are weak as the result of more feed wheat competition into Saudi Arabia and other feed barley markets.
Barley pool estimates are lower. Cash F1 feed barley prices are down $10, but only trading at a discount of $5 to SFW1 or 70/10 wheat.
Therefore domestic buyers are strong on wheat and using the lower, cheaper feed grades where they can. Faba bean and milling grade pea prices showed some strength this week.
