Sowing at Lawson Grain’s Borambil property at Rand in southern NSW. Photo: Lawson Grains

WIDESPREAD double-digit rainfall across southern and central New South Wales and into Victoria has lifted prospects for the winter crop, boosting already planted canola and providing much-needed subsoil moisture for wheat and barley yet to go in.

Despite some rainfall, the weather did little to lift sentiment among growers in northern NSW and southern Queensland, with pessimism over the winter crop persisting.

The firmer prospect of a wheat shipment arriving in Brisbane from South Australia in July has weighed on buyer sentiment, with some believing northern grain prices have peaked.

An almost one-percent rise in the Australian dollar following Tuesday’s rate increase is expected to weigh on export prices, although a strong domestic market is likely to limit the impact on trade.

Table 1: Indicative prices in Australian dollars per tonne.

Buyer hesitancy in north

While isolated parts of the Eastern Downs received decent rainfall, much of the Darling Downs and Western Downs missed the soaking falls needed to support winter crop planting.

Rainfall across the region was led by Oakey with 28mm in the week to today, ahead of Jondaryan 19mm, Toowoomba 16mm, Felton 12mm and Dalby 10mm.

Conditions were little better across the border regions and northern New South Wales cropping areas, with Narrabri recording 29mm over the past week, Gunnedah 26mm, Quirindi 17mm, Wee Waa 15mm and Mungindi 12mm.

At Narrabri, AgVantage Commodities broker Brendon Warnock said while the rain was welcome it was “probably not enough to shift the needle in terms of getting a crop planted” for most regions that didn’t receive summer storms.

“Forbes and Parkes-south are looking pretty good with crops sort of established and going,” Mr Warnock said.

“But anywhere north of there, probably not very much planting until we get a bit better falls, is how I’m sort of reading it.”

Despite grower “pessimism about planting”, Mr Warnock said supply from southern markets and ongoing speculation about cargoes arriving into the Brisbane port zone from SA or Western Australia were dampening buyer demand.

He said this may also be supported by a hint of a possible rainfall event in the forecasts in the coming weeks.

“The buyers are telling me that those prices are probably not there at the moment; that a lot of people have either pulled their bids or sitting on their hands and are not chasing grain like they were yesterday or the day before.

“So, based on seemingly a bit of a weather forecast for mid-May, which doesn’t look super firm as a forecast at this stage, but certainly the sentiment is a bit more changed from buyers.”

Mr Warnock said this sentiment appears “pretty widespread” and there was not “quite as much urgency or chase for grain as there has been”.

Sunrise Commodities managing director Scott Merson said the minor rainfall had spurred on some grower selling, although the ongoing drought has meant a lot of growers still had upwards of 50pc of old-crop stored on-farm.

“It’s been so dry, particularly in northern NSW, that’s where all the old crop stock is, and all these guys don’t really have much of a hope of getting a plant at the moment,” Mr Merson said.

“So they’re carrying all their existing stock, which I would estimate is probably 50-plus-percent of last year’s production, still sitting on farm down there.

“This is just going to get dribbled out.”

He said that’s why trade was now “pulling grain from down near Forbes all the way up here” as well as the planning for cargos out of SA or WA.

Optimism grows in south

In stark contrast to northern conditions, southern growers have welcomed the recent rainfall as a boost to subsoil moisture for the rest of the season.

Falls varied but notable seven-day totals include Grenfell 51mm, Tumbarumba 65mm and Tooma 36mm in NSW; and Aspley 108mm and Mount William 63mm in Victoria.

Pinion Advisory Horsham-based broker Andy Brown said “everything was really upbeat” after the latest rainfall event.

“We’ve got subsoil moisture and this has linked it all up,” Mr Brown said.

“Everything that was sown will come out of the ground evenly.

“Anything that’s sown for the next two weeks will bounce out of the ground.”

He said about 80pc of the canola was already in the ground, with time still remaining for the rest of the plantings to be completed on time.

Peters Commodities Wagga Wagga-based trader Peter Gerhardy said there was “good rain throughout the Riverina” and “from Wagga south, it was 20-30 and 40mm with isolated patches of 50mm”.

“The growers are happy,” Mr Gerhardy said.

“It’s still a drought market or stockfeed market and it’s really kicking along.

“There’s a lot of stock-on-feed growers and they’ve got sheep and cattle on feedlots.”

Beyond weather conditions, the Reserve Bank’s move to lift interest rates by 0.25pc points to 4.35pc has strengthened the Australian dollar by around 1pc against the US dollar, to 72.31 cents.

Mr Brown said this will flow through into “a bit of a correction in the market” with weaker canola, wheat and barley prices.

“Canola could be down anything from $15-20 probably.

“Probably expect to see the export market on the wheat and barley come off maybe $2-3 maybe.”

He said this should be lessened due to the current dominant domestic market which was seeing a lot of the grain moving north instead of to export markets.