TRADE-DRIVEN selling has cut as much as $30 per tonne from new-crop wheat and barley values ahead of a front which is bringing rain to south-eastern Australia.
Victoria has had the best of the falls to date, with parts of the Mallee and Wimmera receiving up to 25 millimetres in the 24 hours to 9am today.
This will help dry-sown crops germinate, and provide a welcome drink for early sown fodder and dual-purpose crops.
In the far south of New South Wales, some districts have had 10-20mm, with total falls of 10-30mm forecast for tomorrow and Saturday in many of the state’s cropping areas, and also southern Queensland.
Liverpool Plains-based Agracom trader Brett Donoghue said updated models had shown encouraging signs for growers across eastern Australia, including northern NSW and southern Queensland.
“As this system has developed, the market’s been hammered, and sorghum, wheat and barley have gotten absolutely pounded,” Mr Donoghue said.
In southern Queensland, the delivered Downs market for new-crop wheat now sits at $350/t, with barley at $325/t, both down around $25-$30/t on the pre-Easter market.
Trade sources said large Australian trading houses, particularly those with bulk-handling assets at the point of loading or discharge, had been sellers at the lower rates.
“New-crop has been trading at very elevated levels, and it’s been pricing in a problem for some time.”
In the trade market, values for boat wheat and barley coming from Western Australia and South Australia into Brisbane and Newcastle are seen as having further to fall to get to export parity.
Further downward pressure on world wheat and barley prices has come from largely good crop conditions in Europe and North America.
Limited farmer selling
Sorghum prices have dropped $10-$15/t in the past week, again mostly on trade selling, with the May-June delivered Downs market now at around $335/t.
While many growers from Queensland’s Western Downs south into Victoria now have at least some oats or early wheat crops established, subsoil moisture remains limited, and further falls on heavy soils particularly are needed to allow the intended area of wheat and barley to be planted.
“It’s positive the rain’s coming, and we’re in much better shape than we were last year,” Mr Donoghoe said of the Liverpool Plains’ situation.
Toowoomba-based Carpendale Farms trader Andrew Jurgs said cash markets had softened considerably in the past week.
“We’ve definitely seen falls in new-crop prices, but not so much in old-crop, and there’s more trade selling than grower selling.
“If you’re a farmer looking at the domestic market, you’d be scratching your head and wondering why the prices have come off so much.”
Mr Jurgs said many parts of southern Queensland were in need of further falls by mid-June to get a winter crop planted with confidence.
“Coming into planting, I don’t think southern Queensland is in a great place, but on a wider scale, if you’re long wheat, especially in the south or west of Australia, you’re still looking for homes for it.”
Softened feed demand
Traders said they believed some feedlots had now covered their grain requirements up to the expected arrival of new-crop in October, and some were likely to ratchet back their expected numbers of cattle on feed.
This is because substantial rain across much of central, western and northern Queensland has created a body of feed which will encourage graziers to keep more cattle in the paddock, instead of sending them to the feedlot at the earliest opportunity.
“Queensland’s a big paddock for feedlots to get cattle from, but we might see people keeping those cattle on grass for as long as they can,” Mr Jurgs said.
In the Victorian market, new-crop feed barley has been trading at $290/t delivered port, about $10/t below last week’s levels, while ASW new-crop wheat has been changing hands at around $315/t.
In the ASX eastern Australian wheat (WM) market today, the January 2020 contract has traded at $314/t, down from yesterday’s close of $318/t, while the September 2019 contract settled at $356.50/t, down from yesterday’s close of $362/t.