Shaky yields, short covering buoy chickpea values

Liz Wells, September 19, 2017

AN UNIMPRESSIVE yield outlook and short covering by traders to cover nearby bulk and containerised export commitments has lifted the price of chickpeas available in coming weeks to rates in excess of $950 per tonne.

A chickpea crop between Coonamble and Walgett shows the impact of a harsh season. Image: Duncan Whittle, igrain

Associated Grain commodity trader, Mark Schmidt, at Dalby on southern Queensland’s Darling Downs, said dry conditions were driving the market.

“What we’re seeing is internal pricing for people filling contracts, and speculating that yields are not going to be good; that’s brought the market up $50/t in the past four weeks for October through to January delivery,” Mr Schmidt said.

He has quoted the delivered Downs price at $930 for October, $900 for November and $860-$880 for December-January.

“Every day, we’ve been dealing with frost risk and dry conditions, and the rise in prices reflects that.”

Last week, Narrabri-based broker, Agvantage, put the September-early October new-crop market for delivery into Gladstone and Mackay port zones at $955/t, and the Darling Downs at around $900/t for October-November delivery.

Robinson Grain Toowoomba-based trader, Anthony Furse, said competition within the trade for chickpeas being harvested in Central Queensland was buoying prices for nearby delivery.

“The interesting thing is that domestic prices are above where the export market says they should be,” Mr Furse said.

“Shipments need to be made, and there’s competition for what’s out there; that’s lifted prices into October, with a little drop in November-December, and then a pronounced drop in January.

“What we don’t know is where yields will be, and if you don’t get in now for your vessel, or the yields are low, you’ll miss out.”

Mr Furse said new export business for chickpeas was not being written, which explained the slide in values between now and January.

Indicative prices for chickpeas delivered to Darling Downs container packers were quoted at around $935/t for October, $900/t for November-December and $810/t for January, with the market hard to call past that point.

“In India, the monsoon’s wasn’t as good as was expected, and they’re planting the crop that will come off between February and April in October-November.

“It would not be surprising for demand to pick up after their harvest, and into the back half of our crop year.”

Agvantage broker, Josh Brown, said he could see little downside for chickpea prices.

“Overseas, they’ve realised our harvest isn’t going to be good; no-one’s got much idea of quantity, and there are orders to fill in India and in Australia.”

Mr Brown said current-crop chickpeas were still making their way out of storage and trading at around $900, in line with new-crop values for October-November.

“Packers may be struggling a little bit, and some are moving them out of Central Queensland to fill their orders.”

Shipments start

The shipping stem for Central Queensland has indicated 90,000t of bulk chickpeas are booked to be exported out of Gladstone and Mackay in total this and next month.

However, containerised chickpeas are expected to account for the vast majority of new-crop shipments.

Quality concerns

Mr Schmidt said the Central Queensland harvest was now about 25 per cent complete, and quality to date had been good, but that was likely to change in the next few weeks as harvest moved into frosted crops.

Moisture stress was also seen as likely to challenge quality through making seeds unusually brittle.

“Hot, dry conditions could take the moisture out of grain and give us a more brittle product that has trouble coming in below the 6pc defective, or split and broken, of the sample allowed.

“It might be hard for growers to get a good, clean sample, and our message to growers is to sell to someone who can take in out-of-spec product and clean it.”

While a number of cereal and canola crops have been cut for hay, grazed out or abandoned, most chickpea crops were expected to hold on until harvest.

Early harvested Central Queensland crops have been yielding 1-1.25 tonnes per hectare, but yields were expected to slide to 0.5-0.75t/ha with later and frosted crops.

Sources said most growers in southern Queensland and northern NSW, had mostly taken out area or “min-max” contracts at roughly 0.5-1.25t/ha.

Last year, ample moisture saw many Australian chickpea crops yield 3-4t/ha; yield estimates for new-crop are generally in the 0.5-1.5t/ha range.

“Considering the season, it’s remarkable how tough chickpeas are. They’ve been a saviour for a lot of growers.”


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