AWB - Too many lions, not enough shares

By Tyson Hosie - AWB

While the humanitarian aspect of the Eastern European situation remains terrible, it has undoubtedly provided very favourable market conditions for us here in Australia to participate in, when we would otherwise have felt more of the weight of back-to-back record production.

International futures markets have retraced significantly, largely due to the strong outflow of speculative money from these bourses on the back of an increasing expectation that an agreement will be arrived at between the Russian, Ukrainian and Turkish governments that will soon see the flow of Ukrainian grain to the world restart.

This is not the first the market has heard of such an arrangement, which was earlier met with skepticism, however this latest round of discussions seems to be gaining traction - good news for the Ukraine, however does have corrective ramifications for the broader market.

Domestically, Australia's east coast remains a mixed bag of planting progress, with agronomic norms being challenged.

Cold, wet conditions starting in southern Queensland stretch through NSW and into Victoria, and while agreeable in areas that were able to sneak in earlier planting efforts, there are many now in situations where the ground simply can't carry machinery, giving way to the expectation of a significantly larger summer cropping program.

This is problematic too, however, as many areas of north-west NSW and south-west Queensland are not renowned for their summer cropping programs due to the searing heat, and as mentioned, are more suited to go for winter cropping programs when the ground moisture is there to use.

In this situation they can take a use it or lose it attitude. At the same time there are cashflow considerations. It's a long time between drinks for winter only programs, especially for those who lost production due to flooding in late 2021 and early 2022.

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