The condition of Southern Hemisphere crops and the seeding of winter crops in the Northern Hemisphere will drive the trend of grain prices for the next few months.
Early this week wheat prices were supported by private forecasts that Australia’s wheat crop could fall to 13 million tonnes if it stays dry, down from the official Australian forecast posted Sept. 18 of 15.5 million tonnes and average production of about 25 million tonnes.
Markets paid less attention to news of rain in Argentina that has put that country’s production back on a comfortable footing. Two-thirds of the crop there is now in good to very good condition, said the Buenos Aires Grains Exchange.
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Argentina has yet to make an official crop estimate but the U.S. Department of Agriculture estimates the crop at 14 million tonnes, down slightly from last year.
Although a major exporter, Argentina receives less notice because almost its entire crop goes to Brazil, its next door Mercosur trading partner.
U.S. farmers have seeded 27 percent of expected winter wheat acreage, a bit slower than average. There is no official forecast of seeded area, but private forecaster Informa’s early estimate is for winter and spring wheat area to rise 3.5 percent to 62.6 million acres.
