PRICE moves for feedgrain were mixed and moderate last week as quality as well as yield prospects weighed on grower decisions about what stock to sell, and limit willingness to commit on new crop.
The split season continues, with dry and unusually high daytime temperatures pushing cereal crops to early maturity in the last weeks of winter, while in the south, cool to cold and wet conditions have featured in the past week.
Most growers in Queensland and northern New South Wales are hoping for average yields at best, and high protein and grades can be expected.
In the southern region, growers are hoping for a gentle spring which will push barley into the reopened Chinese malting market.
With quality issues evident in cereals coming out of parts of Canada and Europe, growers are seeing more upside than downside in prices globally, and this has contributed to their reluctance to forward sell wheat on multigrade contracts, or feed barley.
|SFW wheat Downs||$452||$460|
Table 1: Indicative prices in Australian dollars per tonne.
Dry week in north
Little to no rain has fallen in Qld and northern NSW in the past week, and low cattle prices continue to prompt an upswing in opportunity feedlotting.
“The story is there are more cattle on feed than there have been, and low prices are incentivising people to buy cattle,” NSW AgVantage Commodities broker Brendon Warnock, Narrabri, said.
“When China’s tariff came off there was a bit of a jump, and that coincided with a realisation of how dry things were, and a simultaneous increase in demand for cattle on feed.
“If it’s a dry finish and protein is good, the exporters will be there too,” Mr Warnock said of the wheat crop.”
Spring has come early to the northern region, with some crops already in head.
“It’s getting pretty dry; east of the Newell Highway and through to the Liverpool Plains, crops are hanging on but a top-up of 25-30mm would be welcome.”
“Lotfeeders are looking to secure supply through to new crop.”
With a question mark over how much barley will be shipped around to Brisbane from Western Australia now that China is back in the market, wheat is in increased demand.
“Now that export is more competitive, we’re less likely to see less barley coming around.
“Customers are covered, but there’s room to buy more, and they’re particularly looking at wheat.”
Quality as seen by nutritionists, as well as price, is swaying consumers into barley and away from wheat as current-crop stocks thin.
“There is wheat out there, and there is barley; wheat in general is better quality, H2 and APW, and the barley’s more BAR2.”
Mr Warnock said some growers were happy to meet the market with warehoused or on-farm wheat ahead of what will be a small harvest, but a harvest nonetheless.
“There will be a Downs crop, and a Bellata crop, and a Goondiwindi crop, and we think the consumers will be leaving room to buy at harvest.”
Crops south and east of Dubbo are generally looking at much higher yield prospects than those in northern NSW.
While many growers on the north-west plains of NSW got little to no wheat in the ground because of dry conditions, what has been planted can be expected to be of relatively high protein.
Therefore, it will attract competition from exporters and domestic flour millers, and Mr Warnock said growers were hopeful of hitting higher quality targets, and were also cautious about overcommitting because yields could be low.
“On new-crop, there’s a reluctance to price with forecast not being great.”
“Growers are seeing dry conditions and we’re seeing a slowdown in selling.
On sorghum, little current crop remains unsold, and the lift in prices indicates container business going into China is still motoring.
“Sorghum is being driven by a lack of offers; there’s not a lot left in growers’ hands.”
Slow selling in south
Crops in parts of central and southern NSW received 5-15mm of rain in the past week.
Registrations include: Condobolin 7mm; Forbes 19mm; Temora 8mm; West Wyalong 14mm, and Young 18mm.
Showers extended into Victoria, where Murrayville on 14mm and Swan Hill and Ultima on 12mm topped the registrations in major grain-growing areas.
South Australia also received some welcome showers, with 17mm at Darke Peak on Eyre Peninsula and 14mm at Minlaton on Yorke Peninsula topping the grainbelt’s falls for the week.
Barley values have softened in the south in the past week in a correction from last week’s surge on the China news, while wheat has lifted as consumers pick up buying of current crop.
One trader said China’s announcement was most noticeable in lifting the Melbourne track market, and the delivered Downs market.
“That’s feeding back south, with that Griffith line all the way up putting barley into the north.”
Based on the outlook for a dry spring, and an El Niño Alert still being in place, one trader said growers were unwilling to engage in booking new-crop barley.
“We haven’t done a lot of new crop; the grower has bigger expectations of malt barley now that China’s back.”
Provided frost or a brutally dry finish do not impact the crop, yield prospects are shoring up.
“Growers are throwing out a bit of urea if they can get their hands on it, but it’s probably getting a bit late now.”
Sales of stored grain are ticking over as growers clean out storage at on-farm levels of $350-$360/t for wheat, and $320-$330/t for barley.