The course of a tropical cyclone which has developed off the
eastern Australian coast may prove key to the country's grain fortunes, in watering
sorghum seedlings, and giving a "shot of confidence" in prospects for wheat
While unexpected rains last week, in boosting prospects for
crops which have suffered the driest January for five years in parts of New
South Wales and Queensland, sent Australian grain prices tumbling temporarily
last week, values have started to recover thanks to a dearth of follow-up
May sorghum futures, having lost Aus$20 a tonne in Sydney in
three sessions last week, have since recovered half of that, to close at Aus$336.00
a tonne on Wednesday.
"Let's face it – an inch of rain following weeks of stinking
hot weather and strong winds does not make a whole lot of difference to
production prospects," said Pentag Nidera, the Queensland-based grains broker.
The dearth of rain has meant that, in central Queensland,
just 20% of sorghum is planted, according to the broker, with the sowing window
'More and more
However, a storm, currently named Tropical Cyclone 11P, forming
off the north east cost of Queensland could offer crops more substantial
refreshment, if bringing flooding risks too.
The storm is expected to make landfall on Thursday night, bringing rainfall which locally could hit 10 inches.
"What has potential to generate more of a difference,
particularly in central Queensland, is the tropical depression now brewing in
the Coral Sea," Pentag Nidera said.
Current sorghum prices, which it quoted at Aus$300 a tonne
in the cash market, "will buy plenty more acres if the rain does come".
Furthermore, "any drought-breaking falls further south
resulting from the potential monsoonal influence would provide a shot of
confidence over potential winter crop plantings – which are looking more and
more precarious as each week passes without rain".
In fact, the extent of rainfall, "or lack of it, from here
on in in northern New South Wales and southern Queensland will have more an
influence on new crop wheat and barley markets than either old crop or sorghum".
El Nino threat
In fact, farmers still have some three months before worries
will rise over wheat planting delays, although canola is typically planted
But the comments come amid rising worries about the threat
of an El Nino later in the year, likely to test water reserves in Australia's
Official meteorologists in both Australia and the US have
highlighted growing signals of a nascent El Nino, linked to dryness in eastern
Australian, although they have also stressed that the formation of this weather
pattern is by no means certain.