PRICES for barley, sorghum and wheat have softened this week as the inverse between nearby and new-crop narrows in response to forecast rain across southern Australia which is expected to consolidate yield prospects in all states bar Queensland.
While frost in coming weeks, and either a hot dry finish or a wet one could take the gloss off new-crop quality, barley and wheat crops in all parts of New South Wales and Victoria are on track for above-average yields.
Crop conditions in South and Western Australia are patchier, but around half their cropping areas are having an average or better season, while Queensland conditions are very mixed.
If the 10-40 millimetres forecast to fall over coming days eventuates, growers are assured of harvesting a crop which will cover domestic grain commitments and generate eastern Australia’s first sizeable export surplus since 2016-17.
A stronger Australian dollar and weaker US grain futures have contributed to the softening of the Australian cash market this week, as it readjusts to an export focus.
|Barley Downs August
|Barley Downs Jan
|Barley Melbourne August
|Barley Melbourne Jan
|Wheat Downs August
|Wheat Downs Jan
|Wheat Melbourne August
|Wheat Melbourne Jan
|Sorghum Downs August
|Sorghum Downs Mar-Apr
Table 1: Indicative delivered grain prices in AUD per tonne.
Trade sources maintain Victoria is the only state where growers have considerable grain stocks left on farm, and these are fast being run down as Queensland and northern NSW feedlots look to cover themselves until new-crop becomes available at the end of next month.
“Nearby barley has probably softened the most,” Robinson Grain Toowoomba-based trader Anthony Furse said.
“There’s plenty of stock on farm in Victoria, and the Victorian farmer feels confident in selling it now.
“Barley from the Mallee works into Condamine and on to the Downs.”
Small amounts of southern and Central Queensland sorghum are attracting little interest outside their local poultry and piggery markets.
Because of expensive feeder cattle prices, feedlots have reduced their numbers on feed in recent months, and are thought to be covered with grain to mid-October, when the inverse to new crop is expected to disappear because of harvest pressure.
Limited forward selling
Growers are generally seen as forward sold by 10 per cent on new-crop tonnage, and up to 20pc in places, but consumers have booked limited amounts of new crop in the hope that prices will fall further once harvest gets going.
Mr Noonan said growers had mostly sold their grain ahead of the promising production outlook for new crop.
“A lot of what needed to shift has moved over the past six weeks, and if it hasn’t moved, it’s been booked.”
He said much of the grain had headed north by road to domestic consumers to continue the trend of recent months.
“The majority of August will be clean-up jobs around the place now that we have this rain coming, and maybe one after it.”
Mr Noonan said new-crop selling by growers had slowed up a little this week in response to the lower bids they were seeing.
One trader said a big rain for Victoria in coming days could see further big drops in nearby and new-crop values.
“If it comes through as forecast, particularly in the Mallee and Wimmera, there’ll be wholesale giving up of barley across Victoria.”
Many growers across southern Australia are putting a last top-up of fertiliser on crops ahead of the rain front to further boost yield prospects.
Early harvest next month
Headers are expected to be rolling in early planted barley crops from the Western Downs of southern Queensland through to Narrabri in northern NSW by the end of next month.
This grain will be absorbed by local consumers, and will cover them until big tonnages start to come off in October.
Newcastle Agri Terminal supply chain manager Chris Treloar said new-crop quality could well be mixed this year.
“There’ll be so much grain of different qualities, planted at different times and in different conditions,” Mr Treloar said.
“We could even see grain that was shipped into Brisbane coming south if those numbers work.”
If the end to the growing season and/or harvest are less than ideal, any pinched or stained grain from what is shaping up to be a huge NSW harvest is likely to sell at a discount into the domestic feed market.
Wheat with better specifications looks destined for domestic flour mills and export, and trade sources report the first shipping slots have already been booked out of NSW and Victoria.