Feedgrain Focus: Prices lift from season lows

Henry and Liz Wells, 18/03/2019

Grain arrives in Brisbane ready to supply Queensland consumers. Photo: AgForce

PRICES for barley, wheat and sorghum have risen $5-$10 per tonne from season lows in the past week, with sorghum for June delivery trading yesterday at $362/t delivered Darling Downs.

This shows a narrowing of sorghum’s discount to wheat, now at $65-$70/t compared with $100/t or more in January.

The narrowed spread has come despite a rise in the Brisbane free-on-truck (FOT) market, which reflects pricing of grain arriving by ship from Western Australia.

Wheat is now trading at around $404/t in the Brisbane FOT market, up from the mid $390s last week, while Brisbane barley is trading at $355-$360/t, up from $350/t in the past week or two.

In Victoria, ASW wheat has risen $3-4 per tonne in the past week, and is trading today for prompt delivery into Geelong and Melbourne at $397-$400/t.

Barley has risen by as much as $10/t in the past week, and is now trading at $355-$360/t in Geelong and Melbourne, based on a firming free-on-board (FOB) market for Western Australian barley.

The most recent export sale of WA high-quality barley is believed to have occurred at US$218/t FOB, which compares with $199/t for North American barley into Tunisia.

The Japan sale and a tight global supply situation have helped to pull the WA track market from its lows of is A$283/t to more than $300/t now.

Northern concerns

Rising wheat and barley prices reflect nearby demand for grain from northern Victoria from as far afield as the Western Downs, which is of sufficient distance from shipped WA grain out of Brisbane to make road-freight from Victoria look attractive.

While parts of Victoria had good rain in December, northern New South Wales and southern Queensland are facing a massive subsoil-moisture deficit as grower focus shifts from summer-crop harvest to planning for winter crops

Wilken Grain trader Andrew Kelso said the usual wait for an autumn break in Victoria and southern NSW was not as concerning as the prolonged dry in the north.

“The market is more nervous about the dry in north than in south, and the challenge for northern NSW and southern Queensland is that 50 per cent of their winter crop is grown on stored moisture.”

Mr Kelso said the Victorian grain market had strengthened in the past week, with barley now $15-$20/t above its season lows.

“The market had retreated from where it was in December-January, and consumers have seen some price relief, but no consumer wants to book too far forward because old-crop values will fall away if it rains.”

“The market will be influenced now by what’s in the hands of the grower, which is not much, and what’s in the hands of the trader, and we might see the market strengthen to where it’s at import parity.”

Sorghum selling slow

Broun and Co principal Wal Broun said some sorghum was being sold by Liverpool Plains growers for around $358-$360/t on farm, but volume offered was limited.

“The sorghum market has come up $8-$10/t in the past week as a reaction to the higher barley prices in the Brisbane and Newcastle FOT market.”

Mr Broun said the sorghum market has been volatile in recent days, with strength in the Chicago market spilling over to the Australian market.

The Newcastle FOT barley market has firmed $5-$10/t in the past week to $375-$380/t, reflecting the demand from the grazier marke.

“There’s a lot of destocking going on, and not much dry feed around Armidale and Walcha, or to the north and south.

“That means there’s a lot of handfeeding going on too.”

Hay gets popular

Farm Tender online broker Dwain Duxson said hay prices have started to rally based on demand which spreads from dairy farmers and graziers in East Gippsland in Victoria to the Darling Downs, where feedlots are looking for roughage.

“Demand for hay has picked up in the past three or four weeks, and a lot of people are just pulling the trigger and buying now,” Mr Duxson said.

“It’s canola and wheaten hay which is in the most demand.”

Cottonseed cliff-face

The cottonseed price cliff-face continued this week as the cotton picking season advanced in south-west Queensland, and impact of relatively small supply of ginned cottonseed was not yet reducing spot values compared with the significantly cheaper new crop quotes.

“Prompt cottonseed values have remained around $770/t delivered Downs,” Woodside Commodities manager Hamish Steele-Park said.

Only a small volume of hand-to-mouth trades are occurring.

“New crop, at about $605/t delivered Downs from May forward, remains a wide inverse to current crop.”



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