FORWARD selling of new-crop wheat and barley has picked up in recent days ahead of the front which has brought rain to most South Australian and Victorian growing areas, and parts of southern New South Wales.
In the 24 hours to 9am today, Bureau of Meteorology data shows that while much of the Victorian Mallee has missed out on handy falls, most other districts in south-eastern Australia received 10-15 millimetres.
Some, like Nhill in Victoria’s Wimmera district and Bordertown in south-east South Australia, have received 23-25mm, but with rain now clearing in most areas, and only light showers forecast for coming days, grower selling is likely to wane.
The spike in growing selling does not appear to have pressured new-crop values, as the market comes to terms with what for many growers north and west of Dubbo is their third consecutive failed or unsown winter crop.
Robinson Grain Sydney-based trader Adam Robinson said the new-crop market appeared to be stable despite the run of forward sales.
“We’re seeing a lot of grower selling with this rain front coming through, and up to yesterday, the market seemed to be fairly stable.”
Consensus is that many crops in Victoria are on track for above-average yields, but concerns about yield prospects have now spread from central NSW to the adjoining outer south-west slopes of NSW.
“The dry creep has gone further south, which is not good.”
In the southern Queensland and northern NSW market, most end-users have covered their current-crop positions.
While limited in volume, buying activity has moved to new-crop for delivery from December onward.
Alliance Grains Toowoomba-based principal Luke Walker said markets were a little stronger again this week.
“There’s not a lot going on, but the market’s generally firmer due to the weather,” he said.
With the Central Queensland (CQ) sorghum harvest now over for most growers, sell-side pressure has disappeared, and the market for prompt delivery into Brisbane is trading at $360-$365/tonne, and around $350/t on to the Downs.
“It’s getting quiet now because growers are happy sitting on their sorghum at the moment.”
Buying interest has now switched to wheat in CQ, which will start to be harvested in mid-September.
New-crop wheat on-farm in CQ is now trading in limited volume at around $350/t.
New-crop wheat for January delivery to the Darling Downs of southern Queensland has traded this week at $410/t, up around $15/t from last week, and at around $390/t for new-crop barley.
“Everyone knows the crop in Western Australia is in good shape, and Victoria’s looking good too.
“More vessels are coming around and no-one’s panicking.”
Cottonseed trading has slowed to a trickle, with sellers willing to carry premium-priced current-season stock through to new-crop for as long as the outlook remains waterless.
“In the new-crop market, there are no sellers as there’s no water,” Woodside Commodities manager Hamish Steele-Park said.
“New-season cottonseed bids in the Gwydir and Namoi Valleys are above $500/t ex gin, gin spread, but there are no offers.
“The only current-crop trades are small volumes for drought demand and supplementary feeding, and values are holding firm.”
August and September 2019 ex-gin pick-ups were quoted around $485/t in the Murrumbidgee Irrigation Area region, $505/t in the Macquarie Valley and $545/t in the Gwydir Valley around Moree.
Very light rain has fallen on the northern slopes and tablelands of northern NSW in the past day or so, and graziers who were hoping for some substantial rain from this latest front may be in the market for loads of cottonseed in coming weeks.
Open interest ASX lifts
Wheat and barley Australian new crop futures traded virtually in a circle from where prices had been 10 days earlier, though open interest did increase, especially in barley.
ASX eastern wheat (WM) January 2020 futures traded $2/t weaker over the week. The contract settled on Wednesday 7 August at $342/t. The week high was Thursday 1 August at $344/t. Volume traded during the week was 626 lots and open interest on Wednesday, at 10446 lots, the week’s high.
ASX feed barley (UB) January 2020 traded $6/t firmer this week. The contract settled on Wednesday 7 August at the week high $295/t. It traded 420 lots this week and open interest on Wednesday had risen to 1305 lots a steady increase over the week.