Feedgrain outlook: Sorghum harvest poised to start

Luke Walker, Robinson Grain Trading, 25/01/2012

Luke Walker, Robinson Grain Trading, ToowoombaThe sorghum harvest could start next week, weather permitting, with the bulk of harvest looking to start around mid-February.

Growers are reluctant sellers at current price levels, but are concerned about potential harvest storage pressures and the general lack of demand from lot feeders and domestic consumers.

Sorghum has traded this week at $195 delivered Brisbane which works back to $162 on-farm inner Downs, and Western Downs growers would more likely be in the $150s range on-farm. This isn’t giving growers a lot of incentive to start selling as some would argue selling at these levels provides marginal profit against the cost of production.     

The stronger CBOT wheat and corn futures overnight were on the back of disappointing weekend rains across Argentina with only 60pc receiving less than 12.5mm (half an inch) of rain in the sorghum and corn belts. Trading will become more volatile as we move into a weather market. 

It’s tough right now to be too bullish about wheat while there is an abundance of world supplies.

Although futures were higher last night our Aussie dollar was also up, trading at 1.053, which is a 12-week high against a weaker US dollar. This will counter the upside in futures. This pricing behavior could keep domestic values and activity flat for the next few weeks as international buyers of Aussie grain balk at the higher currency and switch to the cheaper US origin grain.

Domestic markets have traded this week with feed wheat at $196/t January delivered downs and $194 for barley delivered Downs. Sorghum is trading at $182 delivered Downs Feb/March, and barley has traded into Texas feedlot at $186. Liverpool Plains feed wheat remains steady at $180 and barley showing limited demand at $170.

Barley in the Riverina has buyers at $165 and feed wheat $167 Hanwood, also limited trading at these levels.

The Melbourne and Geelong export market is drawing barley from the Riverina and Northern Victorian consumers, Goulburn Valley feed wheat has traded at $190, and $205 into Melbourne.

Overall the Southern feed markets are seeing limited trades and change from last week.

Prices quoted in this column are of an indicative nature only to illustrate trends and do not represent a definitive buy or sell price at a given point in time. For specific prices for your region contact the author at luke@robinsongrain.com.au or (07) 4659 0755 or twitter @lukergtgrain       


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