PRICES for northern feedgrain have firmed this week as grower selling grinds to a halt and limits supply, while southern values have traded mostly sideways.
Southern markets have seen more selling from within the trade to help offset the hiatus in out-turns from growers who have mostly kicked off their winter-planting campaigns.
Seeding is also under way in the north, where those that have missed out on storms need around 25mm of rain to get them going early in the planting window.
|SFW wheat Downs||$414||$410|
Table 1: Indicative prices in Australian dollars per tonne.
North covers into July
Barley is in solid demand for Jly-Sep delivery now that most consumers have completed their Apr-Jun coverage.
“We are getting inquiry on barley…and they want delivery out to July,” Knight Commodities broker Gerard Doherty said.
Barley remains the preferred grain for smaller feedlots looking for its additional roughage as compared with wheat.
“The barley supply down in northern NSW and southern Queensland has certainly tightened.
“A lot of it went malting and the trade didn’t get to see it.”
Mr Doherty said trucks are readily available, but the supply of transport is expected to tighten once the cotton harvest gathers pace.
“There are plenty of wheels available now, but that might change when ginning starts.”
Trade sources report congestion in Brisbane at the four berths loading bulk sorghum for export to China.
This reflects a full supply chain for the moment, and likely downward price pressure to come as harvest of the red grain winds up in southern Qld and northern NSW.
“Chinas’ been a bit absent recently, and there’s savage congestion in Brisbane; if you don’t have delivery slots in April now, you won’t get them.”
Another trader said NSW was seeing plenty of sorghum selling from growers, but wheat was being retained on farm, warehoused, or in the ownership of bulk handlers.
On the Liverpool Plains, where good rain has gotten sowing off to a flying start, growers are selling sorghum and cattle rather than wheat to generate cashflow.
In southern Qld, feedlots are covering July, and their terms of trade have been static because lower feeder cattle prices are meeting lower grid prices from the domestic supermarket chains.
“They’ve dropped their price ideas, so feedlot margins aren’t getting any better.”
On new-crop wheat and barley, bids and offers are around $10/t apart, with the highest wheat bids from major traders sitting at around $410/t and barley $385/t.
At Robinson Grain, trader Jock Benham said a lot of growers were getting ready to plant if they were not already planting.
“There’s not a lot of supply coming to the market…and we’re getting queries now for July onwards,” Mr Benham said.
With the Anzac Day public holiday on April 25, and a public holiday in Queensland in the following week, Mr Benham said the trade and growers have been busy executing contracts booked previously, and cleaning out a few storages.
“The supply of good-quality BAR1 barley has dried up in northern NSW and southern Qld. .
“On new crop, there’s a little bit of tyre-kicking going on, and growers are looking at gross margins on wheat, barley and canola and deciding what to plant.”
South hits straps on planting
Across southern Australia, growers are generally flat out planting canola as the first of their winter crops, and the trade has largely covered itself through May in anticipation of this busy period.
“Growers are more worried about what they’re putting in the ground, and we’re not seeing a lot of inquiry,” one trader said.
Some unwinding of trade stocks can be expected through to July if domestic grain prices maintain their strength, particularly on SFW wheat which is still being exported in great volume.
If the planting of winter crops continues at the pace it has started, growers are expected to resume their current-crop selling program, and possibly start their new-crop one, by mid to late May.
Southern growers are mostly planting canola now, and will follow that with pulses and cereals.
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