Weekly feed grain update
Sorghum prices have held up this week, aided by higher US corn futures. Growers have been reluctant to sell current ex-farm prices, and domestic buyers for sorghum are hard to find as most are using feed wheat in their rations. Feed wheat prices remain stable, underpinned by continued demand from lot feeders and poultry consumers. Feed mills have reported an increase in demand for feed wheat coming into the winter months in anticipation of the seasonal decline in nutrients in grass. There are still large tonnages of feed wheat on the east coast of Australia and we expect a large carry over to remain.
Grain exports are slowing with the high dollar, but we expect Australian grains to remain in demand until the northern hemisphere harvest starts in late July/August. Milling grade wheat is at the mercy of overseas markets with strong competition from other global exporters. Domestically flour millers seem to have their cover with some price spikes due to trade shorts loading vessels. Logistics is also tight with large volumes of grain moving to port via road, being compounded with the cotton harvest and large volumes of seed going to port. Freight rates are also firming as fuel prices rise.
New crop wheat prices for APW port are in the $290/t range. Sowing programs are well under way in the western downs with large areas of wheat acreage expected to be planted. The Darling Downs will kick off in three to four weeks’ time, pulses and barley possibly been left out of rotations. Sowing is well under way in Central Queensland with excellent moisture profiles and should be completed by the end of May. The sorghum harvest is also just cranking up in Central Queensland with many eyes on the quality. Dry areas from Walgett and Moree down to Dubbo are causing concerns, and an estimated 50mm is required to get sowing underway in those areas. There are areas around Nyngan and Gilgandra where sowing has been finished on excellent moisture profiles. From Dubbo south to western Victoria overall conditions are in good shape for sowing. South Australia had below average rainfall for April and this could prove to be issue for the forthcoming winter crop there. In WA farmers urgently need rain, with below average rainfall being measured across all parts and the drought conditions still yet to break.
Luke Walker is a commodity trader with Robinson Grain Trading Co. He can be contacted at (07) 4659 0755.