In 2014, after record or near record rainfall for the previous six months, it stopped raining across large parts of south-east Australia.
What looked like a cracker season fizzled out, with frost also taking its toll.
This year, rainfall over the same period is not quite as high. But very high winter rainfall to date has left many areas with soils at field capacity. Soils brought to life by minimum tillage have soaked up the water like a sponge and are now untrafficable in the really wet spots. There’s money in mud and none in dust.
Despite the difficulties associated with completing paddock work in a timely fashion – and the penalty from not getting enough nitrogen out or weeds sprayed on time – we would expect yields to be above average across these wet parts, so long as we don’t get a complete shutdown of the season as we did in 2014.
We would have to be optimistic we won’t get a repeat of that. Of course, 2014 led in to the 2015 El Nino event. This year we are coming out of that event, heading towards a La Nina. It looks like it will be the proverbial good season the year after the dry one.
A big grain crop here means implications in grain markets. It will add to the big crops coming in from the US, Canada and Russia and to stocks available for importers to choose from.
The drip feed of a bigger crop into global production and stock estimates will continue to be a negative for US futures prices.
It creates a headwind for the markets ahead of our own harvest period.
If the season ends up reasonable in the northern cropping belt, it should push every port zone south of Queensland into a net exportable surplus situation.
We have not had that for several years, and it will pull east coast basis levels much closer to those we normally see in South Australia and Western Australia.
In eastern regions, growers are used to holding a lot of grain on farm. That will tend to swamp domestic and container export demand channels.
Low prices, though, will probably see growers reluctant to sell all their grain, particularly if production levels are high, reducing the tonnage that needs to be sold to meet immediate cash flow requirements.
That will push heavier supplies into 2017, and keep pressure on both domestic and export prices for longer.
But Australia is a very small producer in the global context, and not high up on the list of exporters at the moment with Black Sea, EU, Canada and US all with strong exportable supplies.
The real game for prices into 2017 will not be set by the level of stocks we are holding, but by prospects in the northern hemisphere.