PRICES for feedgrain are showing little movement, with end users now covered out as far as August in a winter market which is shaping up to be very different from last year’s because of greatly reduced grazier demand.
Largely the result of destocking on the slopes and plains of New South Wales, it is expected to eliminate spikes in the market which were the hallmark of last winter’s price movements.
Barlow & Peadon Dubbo principal Andrew Peadon said cattle numbers particularly had dropped as dry conditions continued in many parts of the central west and surrounds.
“It’s a combination of a few factors, with limited surface water and dry dams in some areas, but lack of rain is everything,” Mr Peadon said.
“People are being more severe on their cattle numbers, because once you have a cow and calf, it’s hard to keep feed up to them.
“A ewe and lamb is much more economical to feed.”
Last year, graziers in most parts of inland NSW were paying big money for grain, faba beans, cottonseed, hay and by-products to supplement what little paddock feed they had.
“This year, they’ve cut their numbers back because they’re running out of money, even with good sheep and cattle and wool prices.
“They can’t keep feeding indefinitely.”
Autumn rain has been enough to allow mixed farmers in some districts to plant dual-purpose crops which will alleviate demand for grain for paddock feed into winter.
Barley-wheat spread narrows
In feedlot rations throughout eastern Australia, barley has displaced some wheat in rations in a sleepy market in this three-day week.
ADM accumulation manager Michael Vaughan said this settling of the market, which had narrowed the wheat-barley spread to about $15 per tonne in the Brisbane market, was too attractive for many end users to pass up.
“That lift in barley buying is having an effect on wheat consumption,” Mr Vaughan said.
Western and South Australian barley is coming into Victorian and NSW ports as well as Brisbane, where the free-on-truck July market is quoted at $370 per tonne, compared with wheat at $385/t.
In the interior southern NSW market, feed wheat has been trading at $390/t delivered end user, either from localised supplies, or from South Australia, where trains with wheat and barley were continuing to supply railheads as far north as Narrabri.
Trade sources have said some sorghum from northern NSW was making its way by truck and train into end-users from the Riverina to Sydney to Brisbane, with the poultry sector being its main consumer.
Mr Vaughan said prospects for the Central Queensland sorghum crop, particularly north of Emerald, had been improved by recent rain, and that grain produced was likely to be consumed within the region and at points north.
The sorghum market has changed little in recent weeks, and last week was trading at $393/t track Newcastle for April-May, while the delivered Downs market is stuck in the $345-$350/t range, and $360-$365/t delivered Brisbane.
Variety in Victoria
Malting barley, feed barley, wheat, oats and lupins have all made their way into Victoria by ship from Western Australia in recent weeks, and are supplying mills and maltsters.
Grain from the South Australian Murray-Mallee has also been making its way to end users in the state’s north.
Link Brokering principal Dion Costigan said little volume was trading, as most major end-users appeared to have secured coverage for the coming months.
“Hay stocks are getting much tighter so that’s quietened down too,” Mr Costigan said.
“There’s still quite a bit of hay on farm, but people don’t want to let it go in case they need it themselves.”
Barley delivered Goulburn Valley has been trading at around $360/t, $15-$20/t below wheat, and boat barley coming in via Port Kembla is available in the eastern Riverina at $365-$370/t.
Those feeding sheep in the western Riverina have been paying up to $400/t for barley.
“There are two markets at the moment: the trade market and the grower market.
“Growers aren’t going to let barley go at $360/t but the trade will.”
Traders said the grower market, where farmers are selling a truckload or two to contacts, had been sitting at a premium to the trade market, where parcels of several thousand tonnes were being booked by major millers.
The ASX WM east-coast new-crop January 2020 wheat contract traded 445 lots in the two trading days before Easter; the price settled on Thursday 18 April 18 at $338/t. None traded on Tuesday April 23; open interest was 7487 lots.
The current-crop WM May 2019 price was $3/t lower over the week, trading 102 lots at $358/t; open interest was 1309 lots.
ASX UB barley traded 25 lots over the week. The January 2020 open interest was 155 lots today, and settlement price was $290/t, compared with $292/t on 17 April.
Find further information at ASX grains webpage.
NOTE: Feedgrain Focus will return to its normal Thursday slot next week and is being published today ahead of tomorrow’s Anzac Day public holiday. Lest We Forget.