Feed grain update: Rudderless market moves sideways

Luke Walker, 30/05/2014
Luke Walker, Robinson Grain Trading, Toowoomba

Luke Walker, Robinson Grain Trading, Toowoomba

Grains markets continue to plod along with sideways movement at the moment, with no liquidity in the market and wheat, barley and sorghum all in need of some direction.

Neither buyer nor seller has confidence in taking a position in this market with growers waiting on rain before they are confident to sell any new crop wheat or barley,  and buyers hoping for rain to ease this market and give some confidence in supply.

Wheat seems to have hit a ceiling for the time been with old crop wheat trading into feedlots lots on the Downs at $365 for June, and $335 for delivered Downs November or new crop. Barley is chugging along slowly and feedlots on the Downs paid $355 delivered June, and November barley $314 Downs. Cotton seed is trading at $450 for June delivered Downs and new crop April 2015 seed $400 delivered Downs.

Wheat delivered Liverpool Plains area for June is trading at $335 with barley buyers at $315. Feed Corn on the Plains is trading at $385 for June. Cotton Seed delivered plains $455. Victoria’s Goulburn Valley and Western districts Barley $270 June Delivery and wheat trading $300. In most parts markets have been wide with limited trades reported.

The sorghum harvest is nearly all wrapped up on the Downs with only a few paddocks left with high moisture waiting to be harvested. Overall Downs has been a no frills harvest with poor yields and no real demand for Sorghum.

The Liverpool Plains harvest is 85pc completed, with reports of shot and stained sorghum quite prevalent. This has fired up their market as growers and traders who have been short or pre-sold sorghum have been pineapple-ed.

The Newcastle track market traded up to $335 last week from $295 the previous weeks. Most track contracts are May delivery so the fireworks are nearly over as the shorts buy in Sorghum.

The CQ sorghum harvest has just started and yields and quality look pretty good to date, some reports of frosts in early May will impacts some crops in the northern parts of CQ harvest.  Central Queensland sorghum production forecast to harvest about 360,000 tonnes. Total crop for Australian sorghum production is difficult to guess-ta-mate although we are pegging it at 1.1MMT. In comparison Australia grew approximately 2MMT in 2013 and of that last year we exported 700,000mt to China.

This year US sorghum is about $25 cheaper than Australian sorghum so we have no export interest, and domestically feedlotters still prefer wheat and barley in their rations with only ethanol and Poultry really chasing Sorghum.  So plenty of head scratching os occuring in relation to sorghum markets at present as supply is limited and demand also lacks any clear direction.

Markets overall are looking for some direction for the coming winter months, with as per normal weather and its abnormalities the main player. With 50pc-60pc of new crop wheat and barley planted we need rain to get things back on track and some certainty for new crop.

  • Prices quoted in this column are of an indicative nature only to illustrate trends and do not represent a definitive buy or sell price at a given point in time. For specific prices for your region contact the author at luke@robinsongrain.com.au or (07) 4659 0755 or twitter @lukergtgrain



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