Kate and Naomi Toogood of Henty inspect a new barley line at the Baker Seed Co agronomy plots at the Henty Machinery Field Days in southern NSW which opened on Tuesday and closes today. Photo: HMFD

A SHRINKING production outlook and expensive fuel have seen northern values jump this week, but southern prices have dropped in response to consolidating crop prospects and softer global wheat values.

Nearby consumer demand is modest in the south, but has ramped up in Queensland as farmers pull down the blinds on ex-farm sales and expensive diesel thwarts the idea of booking volume from the south.

Table 1: Indicative prices in Australian dollars per tonne for prompt and January delivery.

Northern crop shrinking

Harvest in Central Queensland is well advanced, and earliest crops are starting to come off in the state’s south.

In the Qld-New South Wales border region, Knight Commodities broker Gerard Doherty said a few barley crops have been harvested, and activity will crank up next month.

“Chickpeas will start next week on the Western Downs; most of the barley’s two weeks away, and wheat’s probably three weeks away,” Mr Doherty said.

Chickpeas are bid at more than $800/t delivered Downs, or $840 Brisbane, and while the price is attractive to growers, Mr Doherty said growers are reluctant to sell until they peas are in the bin.

“It’s bone dry up here and the crop’s getting smaller by the hour,” Mr Doherty said of winter crops in general in the region, adding that “enormous amounts” of barley have been cut for hay due to poor grain-yield prospects.

The dry finish has generated some serious concerns about low testweights in barley, and low yields in wheat.

“Wheat’s yield potential is never as good in barley in these kind of years.”

Mr Doherty said pockets of the border region and into southern Qld can be expected to return some average or better barley yields, possibly up to 5.5t/ha in place, for crops that got decent in-crop rain.

However, most barley crops are more likely to yield a below-average 2-3t/ha, potentially with low testweights.

When combined with area already cut for hay, the north’s new-crop grain supply has tightened considerably, and feedlots in particular are not feeling as sure as they had been earlier in the month about securing local grain.

“In past week or 10 days, buyers are all wanting Western Downs-origin grain but there’s nothing available; growers are holding on tight.”

“If these local fellows have lost 30 percent of their crop’s yield potential because of this hot and dry weather, they’re now looking for more money for what they’ve got.”

Ex-farm Downs markets for both wheat and barley are sitting at $410/t or more, and the trade and consumers are looking south.

South poised to sell canola

Despite its big carry-out and thumping new-crop prospects, southern grain is not calculating into northern consumers because of expensive diesel.

It has lifted the per-tonne road freight for grain to around $140, based on a 1400km Victorian Mallee-to-Western Downs consumer run.

Mr Doherty said the small northern crop means carriers will not be hanging around after harvest’s brief peak, another reason big south-north runs are difficult to organise.

“Trucks will drop us – they’ll go down south and get into decent volume so they can make some money.”

Horsham-based Mygrain broker Andy Brown said the southern barley market has continued to soften, but wheat has found some support from container business.

Canola remains the southern grower’s forward sell of choice, and growers are eyeing a few more dollars per tonne before they book a further tranche.

“As soon as canola gets over $800 at local sites, they’ll start to engage,” Mr Brown said.

Northern interest in southern barley is starting to pick up, but Mr Brown said “freight is our killer”.

The size of the Vic lentil, barley, wheat, canola and faba bean crops means growers will have to consider selling a portion of their cereals at harvest.

Off-the-header prices are looking like $280/t for barley and $310/t for wheat, but are hard to calculate up into Qld, partly because of concerns of road-freight availability as well as cost.

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