A STRONGER Australian dollar has pushed down values for nearby and new-crop grain in the domestic market this week amid limited demand for prompt and deferred delivery.
In the northern market, the small sorghum crop now being harvested in southern Queensland is filtering into the poultry sector, while in the south, consumers appear to be well covered.
Planting of Australia’s winter crop is now nearing completion, and growers are waiting for spikes in the market before selling grain stored on farm, or advancing forward sales of new-crop.
These spikes are likely to come from dips in the Australian dollar, which indicates barley and wheat markets have lost their drought premium and are well and truly back on export parity.
|This week||Last week||Change|
|Barley Downs June-July||$330||$345||Down|
|Barley Downs Jan||$272||$270||Up|
|Barley Melbourne nearby||$255-$260||$260-$265||Down|
|Barley Melbourne Jan||$240-$245||$240-$245||Steady|
|Wheat Downs June||$400||$425||Down|
|Wheat Downs Jan||$295||$310||Down|
|Wheat Melbourne nearby||$355||$365-$370||Down|
|Wheat Melbourne Jan||$295||$310||Down|
|Sorghum Downs Jun-July||$355||$375||Down|
|Sorghum Downs Mar-Apr||$280||$285||Down|
Table 1: Indicative delivered grain prices in AUD per tonne.
Ample pasture across most of southern Australia, combined with subdued demand for meat as stocks built up during COVID-19 lockdowns clear, have reduced grain demand from beef feedlots broiler farms and piggeries.
While the contraction in poultry and pig usage is likely to be short lived, decreased feedlot demand is expected until the end of this year.
The small sorghum crop now being harvested in southern Queensland is selling mostly to piggeries and poultry producers ahead of the central Queensland crop which will be harvested in coming weeks.
The total sorghum crop, including production from northern New South Wales, is expected to total around 350,000t.
In Lachstock Consulting’s latest sorghum supply-and-demand report, new-crop sorghum has been estimated at 1.6 million tonnes (Mt), with 1.3Mt pencilled in for Queensland, and 300,000t for NSW.
“In Queensland, we didn’t see a big wheat plant on the Inner Downs, so we expect a large sorghum area in that region,” the report said.
Robinson Grain trader Jock Benham said the stronger Australian dollar was exerting pressure on grain values.
“Things are edging a bit lower with the dollar going up, and new-crop prices are certainly dropping.”
He said the weaker dollar had made it difficult for exporters to find bids.
“Farmers are busy putting the last of their crop in, and on old-crop, there’s not a lot left on farm.”
In the Riverina of southern NSW, GrainLink trader Richard Gale said consumers were in no rush to buy.
“It’s to be expected; there’s plenty of grain around.
“A lot of growers have already done their forward selling for now, and we won’t see more until fertiliser demand picks up.”
Mr Gale said growers were chasing yield in the softening grain market, and were likely to sell their next load of grain when they wanted to backload fertiliser to top-dress crops.
“Vic growers are holding a bit of grain.”
The prompt Melbourne wheat market has fallen $10-$20/t in the past week, with barley down only $5-$10/t.
“The barley market hasn’t changed too much, given what the dollar’s doing, but wheat is under a bit of pressure now,” Riordan Grains general manager Mark Lewis said.
“Growers are quiet, and they’re looking at pretty big crops coming at them.
“The stockfeed guys are quiet too, and demand is off quite a bit.”
While the nearby wheat-barley spread is still at $90/t or more, the new-crop one has narrowed to close to the normal $40/t.
Grain Central understands that five barley vessels were either sailing to or loading for China at the time of the barley tariff announcement.
One was diverted to the United Arab Emirates and is discharging now, while another is discharging in China, one has already discharged, one is about to go on to the berth in China, and the last is approaching Chinese waters.
ASX barley gain, wheat loss
While forward barley contracts on ASX yesterday, compared with the previous day, closed weaker by $3.50/t, both the January 2021 and 2022 contracts were $2/t firmer than a week earlier.
January 2021 barley settled yesterday at $232/t and January 2022 at $243/t.
Wheat futures moves downward were greater than barley.
The January 2021 east coast (WM) settled yesterday at $294/t, down from the previous day $301/t close and around 2pc below the $300.50/t close a week earlier.
January 2022 wheat a week ago was $315/t and settled yesterday at $307/t.