A FURTHER run of showery weather is supporting grain prices in Queensland and most of New South Wales, while in Victoria, improved new-crop prospects have pushed down values from the bid side.
Adding to support in all markets has been the overnight rally in US corn and wheat futures driven by the USDA’s report on US stocks and acreage.
Australian trade sources report market activity on current and new-crop is limited as consumers take comfort in above-average yield prospects for most producing areas.
Tempering this is ongoing dryness in the Mallee and in Central Queensland versus boggy conditions on the Liverpool Plains which looks like it will not get all intended wheat and barley planted.
|Barley Downs||$310 steady||$280 steady Jan|
|Wheat Downs||$325 steady||$300 down $5 Jan|
|Sorghum Downs||$312 steady||$275 steady Mar-Apr|
|Barley Melbourne||$280 down $5||$275 Jan down $5|
|Wheat Melbourne||$328 steady||$315 Jan down $10|
Table 1: Indicative delivered prices in Australian dollars per tonne.
Little trade in south
Execution of previously booked export grain remains the focus of the southern market amid limited grower selling.
In the week to 0900 today, Victoria’s main grain-growing areas have had rain, but mostly less than 15 millimetres, and this has not affected truck and rail movements as much as it has in the north.
Many parts of the South Australian grainbelt, apart from the Murray-Mallee which got a few millimetres at best, got 10-20mm, as did pockets of southern NSW.
The new financial year starts today, and Riordan Grains general manager Mark Lewis said the wind-up of 2020-21 affairs has helped to keep trade quiet in the past week.
“It’s still all about execution,” Mr Lewis said.
“The season’s picked up in Victoria, and June was a much better month for rain than May was.”
He said this should bring some volume to the market ahead of new crop.
“We feel the grower has a bit they haven’t sold.
“Consumers have been fairly well serviced all year with the volume that’s around.
“They’ve certainly had to fight to get trucks, but we haven’t heard of any running out, and most of them seem to be well covered out to September.”
A consumer source said the Mallee on both sides of the Victorian-SA border, and SA’s Mid North were running low on moisture when compared with other cropping areas in the south.
“They are the regions still of concern, but they can hardly be an island to hold up prices.”
“It feels like there’s quite a bit of wheat out there on farm, even though the system has been executing extremely hard to get grain out through the ports in Victoria, South Australia and Port Kembla.”
Bulk freight rates have risen sharply in recent months, and trade sources say this is making it difficult for prompt business sales to stack up against Northern Hemisphere new-crop.
Trading in new-crop remains nominal, but is expected to pick up in spring as the inverse narrows in the lead-up to harvest.
“It may be September, when people need to clear storages ahead of the new crop, that we see that come to market.”
Wet in north
Patchy rain — up to 50 millimetres of it in the past week — in parts of NSW and Queensland has made accessing on-farm grain difficult.
Highest registrations for the week include Coonamble with 37mm, Forbes with 33mm and Gunnedah with 23mm.
Stewart Grain trader Robbie Quinn said logistics remained a challenge in northern NSW because of successive rain events.
“We’ve got wet roads and wet silos, and we’re having a lot of issues getting grain off farm.”
“This is our sixth week in a row of short weeks.”
While the rain has been ideal for cereal crops in the ground, it is making the spreading of urea to feed them difficult due to the risk or certainty of getting bogged in the process.
Traders and consumers are also talking about the possibility of northern and central NSW being light-on for high protein if the growing season continues to be soft.
On the Liverpool Plains, Bayliss Grain trader Dean Thompson said short-term logistics problems were lifting prices for feedgrain, and the rain was preventing growers from finishing their winter sowing programs.
The Liverpool Plains is NSW’s latest winter-crop area.
“A lot of places on the black soil are finding it’s too wet to put their wheat and barley in,” Mr Thompson said.
“They’ve probably got until the end of the month to do it so no-one’s panicking yet, but it’s certainly wet.”
Some growers from southern Queensland to the Liverpool Plains have a few paddocks of sorghum still to harvest, and are struggling to find a window of dry weather to complete the task.
All sorghum now being harvested is going into driers to get it down to acceptable moisture levels.
There appears little pressure from ginning as the progress of picking and ginning remains slow due to wet weather.
“There are still some dryland crops to be picked in northern NSW,” Woodside Commodities manager Hamish Steele-Park said.
“Wet weather will further delay these.”
Current-crop cottonseed values were described this week as range-bound to a tad softer.
Intermittent domestic demand and export demand apparently willing to book at a price but bot chasing values, also keeping a lid on price.
A vessel is scheduled to load in Brisbane in July bound for the US, a long-time market for bulk when supply, demand and price are opportune.
While current crop cottonseed delivered Darling Downs quotes were around $390/t, and new crop about $50/t below that, there’s little grower selling and little demand for the new season.
“There’s not a lot of 2022 buying interest, with wide bid/offers.
“Crop size is probably getting bigger on water improvements and price of lint staying strong.”
Next year’s a stand-off at this stage.
“We will need something to spark the market into action, such as some export demand or grower selling.”
Shipping stems indicate a 23,000t cargo of cottonseed is due to load in Brisbane later this month.
Due to drought in 2017-19, this will be the first bulk cargo in recent years.