BARLEY values have come under pressure this week from increased supply to the domestic market, but wheat and sorghum have traded steady to slightly higher as traders and consumers endeavour to figure out where new-crop prospects are heading.
Players in the cash market are now calculating how long their booked tonnage will last into coming months as the landscape for lotfeeders changes in the wake of rain which fell – and with more forecast – in parts of Queensland.
This is based on competition for young cattle from restockers, and sagging beef prices, which appear to be trimming intakes at some feedlots already.
Carpendale Commodities trading manager Andrew Jurgs said the feedgrain market was showing signs of weakness from June-July onwards, when the central Queensland sorghum crop and a modest tonnage from the late-planted Darling Downs are expected to hit the market.
Sorghum delivered Downs for June-July has been trading this week at around $415-$420 per tonne, unchanged to $5/t up from last week.
“There’s still a bit of support in that March-April Brisbane track market,” Mr Jurgs said.
“It just doesn’t want to come off that $500/t number.”
A cargo of Western Australian barley is due to discharge in Gladstone this week, which will shore up some of central Queensland’s big end-users until new-crop sorghum becomes available.
“Barley has definitely weakened, and old and new-crop values have come off considerably.”
The delivered Downs new-crop barley market January is bid in the low $320s/t and offered at a few dollars more, while wheat is trading at $360/t, up around $5/t from last week.
“New-crop barley is not getting a lot of support, but April-June is well offered.”
April delivered Downs barley is trading at around $380/t, down $10-$15/t on last week, while wheat is steady to a few dollars softer at $450/t.
“Wheat is holding up on some short covering.”
New-crop sales slow
While recent rain has been a massive confidence booster to farmers, most will need more rain to consolidate prospects for their 2020 winter crop, and only then will they consider forward sales to consumers or traders.
“We’re not going to get a crop planted without more rain, but it’s the best we’ve looked since 2016/17.”
In Armidale in northern New South Wales, Delta Agribusiness broker Tom Vanzella said a limited amount of sorghum growing on irrigation on the Liverpool Plains was trading on the cusp of a small harvest.
“Some irrigated sorghum is coming off, and normally we’re pretty busy with sorghum now, but there’s a vacuum in the market where Brisbane and Newcastle sorghum would normally be trading.”
Sorghum on-farm on the Liverpool Plains in the second-half March market is trading at around $405/t.
“Consumer coverage looks fairly solid for February-March.
“There aren’t a lot of grower-held stocks, and there’s no real incentive for forward sales.
“The trade is nervous about working out where we go from here.”
In the Victorian market, barley for prompt delivery to Melbourne is trading steady to lower at $305-$310/t, down around $30/t from its peak around Christmas.
They rose when the market realised a large sorghum crop would not be planted in southern Queensland and northern NSW, but recent rain has improved the northern supply outlook.
Riordan Grains trading manager Mark Lewis said brightened prospects for new-crop sorghum and winter cereals in Queensland, coupled with deadened demand from China, had depressed barley prices.
“Overlay China and the virus on top of that, and it’s pretty well killed demand for barley going forward.
“We’ve had a succession of demand-driven shocks.”
The Melbourne delivered wheat market is trading at around $370-$375/t, and $380/t delilvered to Riverina end users.
At Jerilderie Grain Storage and Handling, principal David Barlow said the southern market was quiet, with wheat trading mostly softer into Melbourne and the Goulburn Valley, but firming into central NSW.
“It’s very quiet; it’s hard to find a buyer, and just as hard to find a seller.”
ASX grain futures volumes traded actively on two days this week, February 18 and 19. ASX eastern WM wheat volume was 1820 lots on those days of the total 1920 lots traded in the week to February 19. Barley futures traded 1295 lots, the activity taking place on the latter two days.
Wheat prices broadly were 1 per cent higher yesterday than a week earlier.
The January 2021 contract settled yesterday at $337.20/t and was $334/t on February 12. The differential between March 2020 and January 2021 price increased from a discount of $22.50/t on February 12 to a discount of $23.80/t on February 19.
Barley ASX was $1 higher over the same period, and the January 2021 contract settling yesterday at $278/t.
The barley/wheat price spread settled at $59.20/t yesterday, up from $57/t a week earlier.
No doubt cottonseed is a two-speed market. From the high-demand-low-supply season it has experienced in 2019 and 2020, high prices seem set to remain until rain falls in all catchments. Cheaper prices from ginning 2021 recently began to trade.
“Things are looking positive for Queensland next year,” Woodside Commodities manager Hamish Steele-Park said.
“While some good heavy rain has fallen across parts of central/northern NSW, a lot more is needed to raise dam levels in NSW.”
ABARES this week forecast production in Queensland in 2020 at 53,000t (5-year average 347,000t) and New South Wales 138,000t (5-year average 669,000t). While 2021 will be a better year for irrigated cotton in Queensland it does little to reduce prices this year.
New crop stock will come online soon from the gin at Emerald according to Mr Steele-Park, though values and availability from CQ are not clear, the spot guide price cottonseed was quoted ex Murrumbidgee Irrigation Area site at around $610/t February pickup.
“Gin spread 2020 values were drifting lower at approx $640/t ex Gwydir Valley and $630/t ex Namoi Valley, however bids now are getting hard to find.
“There’s not a lot of activity. It’s a general standoff between buyers and sellers on seed for 2020.”
Cottonseed for delivery gin period in the 2021 season has begun pricing at an inverse to the 2020 crop of the order of $180/t to $220/t, the catalyst for pricing 2021 Queensland and north/western NSW cottonseed being the big price inverse and some water being available in Queensland.
Gin period 2021 cottonseed has traded intermittently.
“When the offer side appears ex the NNSW gin sites it’s been in the $450/t range and as a general rule buying interest was valuing it at $400-415/t ex.”
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