Harvest has started in northern NSW, with the earliest barley crops north of Walgett and Moree coming off this week.
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This marks the start of what will be a remarkable turnaround for NSW grain producers after they have suffered through three years of below average production.
The state's wheat production alone is expected to exceed nine million tonnes this season, which is a whopping four times as much as in the drought-affected production years of 2018 and 2019.
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And, with a finish to the weather that remains very kind to the central and southern regions of the state, we expect this production estimate could increase if the rain "turns off" as we progress further into harvest.
The only risk to the production forecast is, of course, the pending La Nina weather system that typically delivers above average rainfall to eastern Australia.
If NSW receives increased rainfall through the months of October to December, this would risk destroying the quality of ripened grains that farmers have waited some years to be able to harvest a crop of this magnitude.
With local pricing, we have seen the market increase and stabilise in recent weeks.
This is in part due to the dry conditions in the west of the country, with Western Australia and South Australia mostly missing the beneficial rains we have had throughout NSW and Victoria.
Weather conditions in WA are particularly concerning, as temperatures remain above average. And, with no significant rain on the radar to finish the crop, our friends in the west remain desperate for finishing falls for what could be a below-average crop for that region.
Local prices at the key Newcastle and Port Kembla ports have remained close to $300 a tonne in the past fortnight for Australian Premium White 1 wheat.
It is expected many farmers will sell a percentage of their crop as soon as it is harvested after years of drought.
This will lead to some downward price pressure at harvest. But there may be some small shorts, as the export channel is brimming with vessels destined to leave the Newcastle ports during November and December.
If there is not enough grain that can be moved to the port-level to fill these boats as they are due to depart, this will create a situation where buyers need to pay increased values to get this grain delivered - and to fill the ship.
Globally, pricing continues to remain strong due to dry conditions in the northern hemisphere.
This is particularly relevant in Russia, which remains the biggest exporter of wheat around the world.
Growers are currently in the planting phase across the Black Sea region, and the lack of soil moisture in countries such as Russia, Ukraine and even Romania is triggering a reluctance by producers to sell their current wheat stocks that were harvested from the previous year's crops.
If the dryness continues, we can expect to see global prices increase as Russian farmers hold on to grain production in view of rain.
