LOGISTICS issues in the northern market have held prices aloft this week while in southern markets, signs of softening in global pricing as well as improved road-freight ability have allowed wheat prices to drift lower.
The market for H2 wheat delivered Brisbane consumer breached $600 per tonne, making the Brisbane wheat market the dearest in the country, and putting it ahead of even Adelaide.
It reflects the squeeze on truck availability in southern Queensland, and ongoing rain delays affecting grain movements on farm and at ports, storage sites and mills.
|SFW wheat Downs||$505||$505|
|ASW wheat Melbourne||$493||$502|
|SFW wheat Melbourne||$490||$502|
Table 1: Indicative delivered prices in Australian dollars per tonne.
Coastal rain slows movements
Barley delivered northern consumer remains almost impossible to procure, and wheat for poultry, pig and feedlot rations on the Downs is mostly coming out of the Moree district in northern New South Wales.
Patchy rain in the past week means growers are still trying to pick cotton and harvest sorghum and mungbeans, and plant winter crops, as well as out-turn grain for domestic and export markets.
“There have been wet-weather delays loading vessels in Brisbane, and the market’s anxious,” one trader said, and added that trucks have had to wait for several hours in some cases to load or unload.
Most of the northern region’s rain has been centred on the coast, including Brisbane and Newcastle.
Some traders who booked wheat for April-May pick-up on farm back when it was in the $300s per tonne will not be able to collect it by the allotted time due to freight shortages and delays.
This may spark a round of spot buying.
However, traders are optimistic the market’s peak has been reached, based on global factors, and ample up-country grain supplies which will be easy to access once the weather dries out.
“A reduction in global prices has come following some hope that the Americans will get all their intended corn area in in the right window, and some overly optimistic ideas about Russia,” another trader said.
If Ukraine can start shipping out grain via the Black Sea, this would help allay food-security issues in North Africa and the Middle East in particular, and could enable world grain prices to drift lower.
Southern planting in final phase
Most growers in south-eastern Australia are at least three-quarters of the way through their planting programs, and some have finished.
“I reckon 80 per cent of the crop is in in Victoria,” Riordan Grain Services manager Mark Lewis said.
While liquidity remains low, the wind-down in paddock work has seen some growers show interest in selling as the global market appears to be in a correcting phase.
“There’s been a drop from last week in prices, and we’ve seen a little bit of negative movement in offshore markets.”
Export pace is not expected to dip ahead of new-crop availability, but trade sources say southern consumers appear to be across that, and are doing less spot buying in order to avoid last-minute logistics issues.
“April-May have been hard, but I feel June is starting to free up just a little bit.”
Wilken Grain trader Andrew Kelso concurred, and said he had seen a drop-off in spot demand from domestic consumers.
“Spot buying has dropped off the radar, and people seem much more focused on giving two weeks’ notice,” Mr Kelso said.
The Port Adelaide zone continues to suck grain out of western Victoria.
“SA is still paying a premium, and wheat left in western Vic will go to Adelaide, so Vic will still have to pull grain out of southern New South Wales, but people seem to be getting by.”