Anyone here notice how grain has broken away from the oil price just lately. Wheat has risen almost 15% in an almost constant upward line, while oil has probably fallen further. Grain and oil have been like blood brothers since the commodity crash started.
I think the market is realising that if the world is to get enough food next season, that farmers have to be adequately compensated for the risks they take. Right now we aren't, so acres and inputs have been cut. The smart money is coming to this realisation I think.
I have had so much rain in the last 2 months that I could plant all my wheat stubble to grain or oil seeds right now and probably grow 3 to 4 tonnes per hectare with very little rain, but I just can't make the figures add up. The risks are too high. I know grain will probably be worth more next year, and input costs are crashing. Why take the risk now? So there is a few thousand tonnes of grain that won't be grown. I've also cut fertilizer. It's currently more important to survive, rather than make as much money as possible.
Also talk of a developing la-nina, that will mean dry in Argentina and Brazil, and problems elsewhere, but mostly good news for Australia. We are certainly in a wet period in northern NSW. We have had 32 inches for the year now on the southern Liverpool plains and looking like it's about to rain again in minutes. The last of the wheat is being harvested now, what's left of the rubbish that is.
