PRICES for wheat and barley have firmed in the northern market this week, despite consumer locations drying up for growers with grain to sell ahead of harvest.
In the south, growers are seeing nothing bearish in domestic or offshore markets to encourage them to sell, and as seasonal outlooks point to an El Niño event establishing next month, they are cautious about over-committing tonnage.
However, seasonal conditions as of this week across much of the southern Australian grainbelt are good, and yield prospects are currently sitting at average or better.
The 2023-24 wheat crop’s quality profile remains the big unknown.
Growers do not want to commit tonnes to a multigrade contract as hopes for producing higher milling grades that could return more in the cash market seem well founded.
Domestic consumers are seen as well covered, with highly competitive freight rates making wider drawing arcs feasible from the cheaper southern market into the much dearer north.
|SFW wheat Downs||$464||$460||$471|
|Barley Melbourne||$365||$370||$373 down $1|
|ASW Melbourne||$400||$405||$415 up $5|
|SFW Melbourne||$395||$400||$405 up $5|
Table 1: Indicative prices in Australian dollars per tonne.
Harvest nears in north
At Dalby Rural Supplies, agronomist and director Andrew Johnston said yield prospects were diminishing rapidly as dry conditions prevail.
“This is the money end of the season for us, and we’ve had virtually no in-crop rain since planting,” Mr Johnston said.
“Any double-cropped country is severely struggling, and some western cattle are in on those crops already.”
While a few crops are being dropped for hay, Mr Johnston said the numbers on grain stack up, given historically high prices for wheat and barley, and lower input costs compared to last season.
Cheaper fertiliser, nil requirement for fungicides and reduced need for herbicides are behind the lower input profile of the 2023-24 crop.
“Our input costs have come off remarkably; it’s a lower-yielding, lower-input year.”
Trade sources say Queensland’s wheat-export program looks like being a thin one in 2023-24, but if southern NSW, the Victorian Mallee and the South Australian Murray-Mallee have another big year, loads of wheat and barley could keep pricing north.
“Transport is coming into a world of hurt; it looks there’ll be no surplus to export in any great volume, and twice as much trucking capacity here as we need,” one Qld trader said.
Consumers including feedlots are generally seen as fully covered into early October as, like growers, they see nothing bearish offshore or locally to have them expecting a price drop ahead of harvest.
“It’s very hard to find homes for grain delivered in September.
“Some growers are fast running out of time to clear out storages ahead of harvest.”
Scattered storms and showers brought very patchy falls to northern NSW, and registrations included: Coonabarabran 18mm; Dunedoo 11mm; Moree 6mm; Quirindi 10mm, and Wee Waa 14mm.
All falls were gratefully received by cereals either running to head, or in head already.
For most crops in the northern half of NSW and into southern and Central Queensland, average yields at best are now expected following a dry finish to the growing season.
While long-fallowed country that has jagged a rain or two since planting could make cereal yields of 3t/ha on the Downs, but most crops are looking at 2t/ha at best.
However, some Maranoa crops that had good rain are expected to yield above that, and will go mainly into feedlots.
Headers are expected to be rolling in CQ in the next fortnight, and in the Maranoa by late September.
Quiet in south
South and east of the Mallee, most Victorian crops had a few millimetres of rain in the past week to buoy yield prospects.
However, all regions of South Australia, Vic and southern NSW are looking for rain as crops near grain fill.
GeoCommodities broker Brad Knight said while crops generally look very good, growers are cautious about over-committing as the Bureau of Meteorology’s El Niño Alert remains in place.
“There’s a little bit of forward selling going on, but growers are definitely behind where they would normally be,” Mr Knight said.
“If you ignored the forecast, you’d be extremely optimistic about how the crop’s looking, but droughts move south; that’s the pattern we’re all familiar with.”
Offshore volatility based on weather in other parts of the world, coupled with no downtrend to be seen in the market, has removed any call to action to the grower to sell.
“Buyers aren’t pushing to buy too much just now either.”
As in the north, crops are maturing early in mostly clear and warm days in the last month of winter.
On the export front, trade talk is that Australia’s first cargo of barley to China since it lifted its tariffs earlier this month is loading at two Western Australian ports.
The return of this hugely important customer for Australian barley is giving the grower increased confidence in barley demand, and providing significant competition to domestic consumers on new crop.