PRICES have firmed for barley across eastern Australia in the past week and for wheat in southern markets as traders and consumers book the last of their cover into late January.

Grower interest in selling is mixed, with patchy rain in some districts sparking some concerns about a late impact on quality of unharvested grain.

On the logistics front, one major grain-train derailment in New South Wales and a minor one in Victoria occurred this week, while in road transport, availability of trucks in the north is showing signs of increasing as harvest in central NSW winds up.

Storages in southern NSW are full or close to it, and Victorian ones are filling fast as the export program hits capacity to free up some space at ports and up-country sites.

	This week	Last week	Change
Barley Downs Jan	$268	$265	Up
Barley Melbourne Jan	$240	$233	Up
Wheat Downs Jan	$297	$300	Down
Wheat Melbourne Jan	$300	$295	Up
Sorghum Downs Mar-Apr	NQ	$300	NQ

Table 1: Indicative prices in AUD per tonne.

Mixed in north

Barley values have firmed in the past week based on solid demand from feedlots in southern Queensland and northern NSW.

As eastern Australia moves over the hump of harvest, and rain delays progress in parts of Victoria and southern NSW, demand for road transport has eased a little.

This has seen road-freight rates drop a few dollars per tonne, which is enabling feedlots on the Darling and Western Downs to price barley from as far afield as central NSW.

Most feedlots are now seen as fully covered over January, and up to 60-per-cent covered after buying grain on a spread out to June.

At Narrabri, Agvantage Commodities managing director Steve Dalton said northern NSW growers have sold what they need for cash flow in the short term, and selling interest appears to have moved south.

“There are road trains driving through Narrabri and Goondiwindi on the way to the Downs carrying grain from places like Tottenham,” Mr Dalton said.

Growers in central NSW have had excellent yields, and are selling barley at around $180/t on farm, which with $80/t added for freight gets it delivered to Downs consumers at an attractive $260/t.

Mr Dalton said the northern NSW grower was not likely to do much more cash selling before the new year.

“Now they’re sitting back waiting for selling opportunities in the first quarter, once the Northern Hemisphere crop comes out of dormancy, and we know how the South American crop is going.”

Mr Dalton said the domestic market was showing signs of being oversold.

“The bid looks cheaper now than it needs to be; the trade has reduced it to levels where sellers have stopped selling.

“In central and northern NSW, it’s a battle between the psychology of the buyer and the seller.

“The buyer thinks there’s such a big crop, and they’ve gone short; at some point, they need to cover.”

“The dollar going through 75 cents is not helping.”

Consumers are transitioning their buying from grower to trader ahead of the Christmas-New Year break, and the last of their short covering has boosted trader bids to growers.

On cottonseed, some feedlots are booking ex southern Queensland gin tonnage at around $385/t from April 2021 to March 2022.

Activity moves south

In southern NSW and Victoria, growers are selling limited tonnage of barley and wheat as their quality picture clarifies.

Godde’s Grain Culcairn trader Peter Gerhardy said the domestic feed market appeared to be holding off the last of its harvest buying to see if recent rain events will push some weather-damaged grain on the market at a hefty discount.

“The yields and the prices have held up remarkably well as we’ve gone through harvest, and you could pretty well throw a blanket over the difference between H2 and GP wheat.”

A higher-than-normal proportion of high-protein wheat evident early in the eastern Australian harvest has continued as harvest has rolled south into Victoria, which collapsed the protein premium early in the piece.

Mr Gerhardy said the market was yet to see big tonnages of downgraded or low-protein grain.

“Feedlots have been buying barley, and depending on what happens with quality on the last 5-10pc of wheat to come off, we might see some bigger discounts if we get some weather damage.”

Mr Gerhardy said growers were still selling wheat and barley in steady amounts, and yields of up to 7t per hectare where negating the impact of prices having dropped around $20/t for wheat and barley since harvest started.

“Prices have held up relatively well, which is remarkable given the volumes of grain we’re seeing.”

One trade source described the Victorian crop as “an absolute monster” which is putting pressure on storages on and off farm.

While road and rail have been handling the southern crop comfortably as it moves to consumers and export terminals, two train incidents have added some pressure to logistics this week.

The major one occurred near Port Kembla in NSW, and the minor one occurred at around 4pm on Monday on the Benalla-Oaklands line near St James.

An Australian Rail Track Corporation (ARTC) spokesperson said approximately 10 grain wagons derailed but remained upright in the incident, and no injuries from it were reported.

ARTC has advised the Benalla-Oaklands line will remain closed until further notice.

Sources have told Grain Central the incident occurred at low speed, and that the train was carrying wheat bound for export out of Geelong.

Due to flexibility within the Victorian system, the incident is not expected to impact the supply of grain to this or subsequent vessels loading in Victoria this month.

Discussions held in the wake of Tuesday’s derailment near Port Kembla have pointed to the possibility of the line being partially reopened from 4 January.

This will involve one of the two lines opening as a rail path in the grain cycle for a few hours overnight, while clean up crews are to operate in daylight hours until the site is cleared and the second line can be reopened.

NOTE: In light of our annual three-week shutdown, the next edition of Feedgrain Focus will appear on 14 January 2021. We take this opportunity to wish all our readers and their families a Merry Christmas and a Happy New Year.