Economic outlook affecting international grain prices
For several months now, international grain prices have been steadily falling across commodities.
Several factors are contributing to the softening of the market, including an overall drop in global demand for grain as customers respond to a worsening economic outlook.
High inflation and increasing interest rates are being felt in many key markets, including southeast Asia, where consumer spending has decreased.
The war in Ukraine is having a similar effect on European markets, which are grappling with the financial fallout of supply chain disruptions.
On top of this, many international customers are sitting on comfortable stock positions. Many are waiting for grain values to decrease further, and for new season grain to come online before re-entering the market. This has decreased international cash and futures prices across some grains.
On the supply side, large harvests in Russia and Australia have left an historically high level of old season crop still unsold.
Supply could be further bolstered by strong new crop volumes out of major production areas, particularly Europe and Russia, where growers are enjoying favourable seasonal conditions.
While WA growers are not realising the historically high prices seen in recent years, Australian grain values are now far closer to international prices than seen throughout the 2022-23 harvest.
We will continue to provide you market information through our Down the Line and market update newsletters, audio updates, and weekly 7News Regional WA grain market TV reports.