THE FIRST loads of what is expected to be a massive southern harvest have begun to trickle into bins in South Australia’s western cropping belt on the Eyre Peninsula.

And with significant tonnages expected from South Australia, Victoria and the eastern Riverina, there is likely to be significant pressure on already low grain prices.

Market bears have put on-farm returns for feed barley at below $100 a tonne, although the market has not yet reflected that.

Indeed, there was a slight boost to cereal prices, primarily on the back of a surge in Chicago Board of Trade (CBOT) December 09 futures, which rose 5.6pc this week to US494 cents a bushel, rising from contract lows.

Analysts largely attributed this rise to weakness in the US dollar, meaning much of the gains will be lost to Australian growers due to the high value of the Aussie dollar.

ABB’s fixed wheat prices were at $196/t port in Victoria on Tuesday, while feed barley was at $142. Port freight costs in key Victorian growing zones range from $20-35/t, meaning F1 barley will only net just over $100/t for growers freight disadvantaged to port and without a domestic buyer nearby.

Meanwhile, the South Australian harvest kicked off, with ABB reporting its first delivery of barley on Friday.

It marks an early start for South Australia, with the traditional first load of barley received in mid-October.

However, the early start does not mark a poor season, as is often the case.

The South Australian Department of Primary Industries (DPI) believes this will be the biggest harvest in the state since at least 2005.

Meanwhile, the ProFarmer crop condition index (PCCI) has shown the national crop forecast has improved during the season.

Bucking the trend of recent seasons, where poor springs have seen prospects deteriorate quickly, the strength of the season in South Australia and Victoria has outweighed troubles in northern NSW and Queensland.

Both Victorian and South Australian crops are rated in the top 30pc of years, offsetting NSW and Queensland, both in the worst 30pc of years.

Western Australia is experiencing generally an average to slightly better than average season.