With harvest 2025/26 completed, we have a better understanding of the quality available to the industry for the coming year. The VIC Mallee was an average crop at best, but other areas of VIC produced close to the quality Farmers had aimed for which is amazing after such a tumultuous start.
The overall National crop was considered to be a success. QLD and NSW again produced a stellar harvest. While maybe not quite as big as the 2022/23 season, varying estimations have placed the Australian Wheat crop around an average of 32-34 million tonnes. The higher levels of protein were also welcomed in cereal crops particularly in parts of VIC and the Riverina.
The Western Australian crop was significant again and producing more protein than what is considered normal, just as it did last year. That is, traditional ASW and APW grades gave way to a bigger AH2 component in the Silo than usual. When W.A produces quality outside of its normal ASW and APW grades, it allows it to compete (price dependent) on sales into some of the more traditional Southeast Asian markets normally serviced from East coast Australia. This year, North East Coast Ports will continue with its High Pro sales back into its traditional markets particularly for grades such as APH2. But, the challenge will be low export parity values and stiff competition from other grain producing origins.
Victorian Barley quality was very good. Witha significant portion of the crop achieving malting standard, growers have been rewarded with a significant price spread over the B1 standard.
South Australian crops fortunately had better yield levels than last year. The Southeast of S.A was exposed to a late sowing program like its Victorian counterparts due to the lack of any meaningful Autumn break. It was put on the backfoot but recovered somewhat with late rains and a timely finishing rain around October.
Markets have been quite subdued over the last couple of weeks. Growers have concentrated on packing up gear (or even completing harvest in the VIC Western district) after a long and arduous harvest for some due to extreme days of heat. Grain buyers have largely received their fill for now. As a result, the market should be slightly softer with not a lot of volume trading and prices being affected by a strong AUD that has pushed through the 70 cent mark versus the U.S dollar, making it difficult for the exporter to compete into traditional markets. Markets will naturally move based on how eager the seller or buyer are to come to market at any point in time, but we are sitting at basis levels where we are not an attractive option for buyers in our traditional export markets versus our competitors from other origins. This points to the need for markets to soften in order for Traders to move Australia’s exportable surplus, but with prices not far off the cost of production for the farmer in many regions, there will be a reluctance to sell en masse and only entering the market place when cash flow requires it.
With the reduction in exports in Victoria this year compared to recent years, the road/rail logistics infrastructure will not be as challenged as we saw in 2022 and 2023. All ports were busy moving the abundant crop unlike this year were freight will be more readily available. This very much assists farmers in having the ability to get their product to their chosen marketing location within the desired contract period without disruption.
The Australian domestic market will continue to be there as a buyer month in, month out regardless of how competitive we are against other growing nations. We look forward to servicing our domestic clients again in 2026.
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Author
Justin Fay
Commodity Manager
