LAST week's report from the US Department of Agriculture has further boosted global markets, particularly oilseeds.
The USDA and other authorities in Brazil have again reduced the projected production of soybean in Brazil.
With about 75 per cent of the harvest completed, the USDA pulled Brazilian soybean production back two million tonnes. Drought has crippled soybean production in southern Brazil, reducing production by 30 per cent on last year's harvest.
Oilseed markets in the US, Canada and France have all responded despite the well-known effects of drought in this key source of exportable soybeans.
Though new crop canola prices spiked last week to $576 a tonne from Portland and Geelong and $572/tonne from Melbourne, prices havesettled at about $565/tonne delivered to all Victorian ports. Brokers report that growers are selling small parcels from 25 tonnes to 200 tonnes.
Prices for the small volumes of unsold old-crop canola are $16/tonne lower in sites behind the ports of Melbourne and Portland. Shipping logistics are playing a role in these prices.
The sharp increase in canola prices over the past three months is changing the shape of grain production in Australia. Due to low wheat prices, analysts forecast canola production in NSW will be 30 per cent higher and chickpeas 25 per cent higher than last year.
Strong demand from the subcontinent is supporting chickpeas for both old and new crop shipping slots. Chickpeas (8mm) have been trading at $700/tonne delivered to Wimmera-based grain packers.
Despite the rise in wheat prices following the USDA reports last week, wheat remains burdened with rising production and bigger stocks.
The trickle of sales of stored wheat and barley has continued. The cereal grain market is restrained in a tight trading range.
Brokers' analysis of exporter bids for March reveal each exporter bid APW wheat in a $5/tonne range, while F1 barley was restrained in a $3 range. Storage fees are now kicking in for warehoused grains.
Trading activity is expected to slow in the next month as growers sow crops.
Following the traditional opening of the planting window after ANZAC day there is expected to be a noticeable reduction in the volumes of grain traded. Growers in the Mallee are looking for 40mm to 50mm of rain to establish crops in ideal conditions.