GRAIN CO-PRODUCTION UPDATE - Issue 5

Dear Farmer

In this issue AACL provides an update on the grain market, the 2010 season EPRs for wheat, barley and canola and, if you're nearby, we encourage you to drop in and visit us at the Mingenew Lions Midwest Expo held next week.

Grain Marketing – Market Update

International grain markets continue to be volatile with the ongoing fallout of drought in Russia and the unfavourable end to the season in some Western European countries. The Russian Government has implemented a ban on grain exports and is now calculating how they can best utilise their stocks to stop their domestic price of grain going through the roof and affecting their economy. However, there is no cure for high price like high price and vice versa. This control over prices will lead to lower prices for farmers for any unsold grain they may have and could then affect their planting intentions. It is a complicated situation which is also expected to involve the importation of grain into Russia. At this stage, it is unknown what grain they will import or when. 

The USDA will release their latest world supply and demand report tonight which will provide an indication of future market expectations. The loss of grain into the world trade, as a result of the Russian drought, has lead to greatly increased demand for Australian old crop. It was initially expected that Australia would have substantial carryover from 2009 to 2010 however demand now looks likely to remove most, if not all, of this carryover. AACL is now waiting on this information to see how this affects demand and price of the 2010 Australian crop.

2010 Season EPRs

AACL advises that its 2010 Grain Co-Production (GCP) Grain Price FOB Estimates (AUD$ per tonne) are as follows:

                     Wheat         Barley           Canola      
WA               330              285                550              
SA                325              285                550              
VIC               325              285                550
NSW            325              285                550               

2009 Season EPRs

At this stage, there is no change to the 2009 GCP Grain Price Estimate or the situation regarding distributions or cash outs as previously advised in Issue 4 sent 3 September 2010.

Mingenew Lions Midwest Expo

Visit AACL next week, at the upcoming Mingenew Lions Midwest Expo, held 16 and 17 September, at Site 45. Field days provide a great opportunity for our staff and farmer clients to meet in a casual environment.

Should you have any questions in regards to this email,  please contact your Regional Area Manager or Grower Services on 13 000 GRAIN (47246).

Yours sincerely

SIMON FOLEY
General Manager - Product Services