SUBDUED demand from consumers and limiting offerings from growers and traders have seen feedgrain trade mostly sideways in the past week.
Sorghum is the only grain to have softened for nearby and deferred positions, despite production forecasts for the harvest now under way in Queensland being ratcheted down.
|This week||Last week||Change|
|Barley Downs June-July||$345||$345||Steady|
|Barley Downs Jan||$270||$255-$260||Up|
|Barley Melbourne nearby||$260-$265||$260-$265||Steady|
|Barley Melbourne Jan||$240-$245||$245||Softer|
|Sorghum Downs Jun-July||$375||$390||Down|
|Sorghum Downs Mar-Apr||$285||$295||Down|
|Wheat Downs June||$425||$420-$425||Up|
|Wheat Downs Jan||$310||$310||Steady|
|Wheat Melbourne nearby||$365-$370||$370-$375||Down|
|Wheat Melbourne Jan||$310||$305||Up|
Table 1: Indicative delivered grain prices in AUD per tonne.
Trade sources have told Grain Central the cash market has done all the reacting it is going to do to China’s imposition of tariffs on Australian barley.
“The market always overreacts to bad news, and now it’s corrected itself,” one trader said.
In Victoria, GeoCommodities broker Brad Knight said the limited trade reflects conservative positions held on current-crop barley and wheat.
“A lot of mid to large traders didn’t have big positions in Vic this year.
“They haven’t had a big book on to start with, so they don’t have much to sell, and farmers have certainly disengaged.
“There’s a lot of focus on new-crop rather than old, but still there’s not much trading.”
Seasonal conditions from Moree in New South Wales through to south-west Victoria remain excellent, and most of South Australia’s crop is in good stead now that winter-crop seeding is over, or close to it.
Over the weekend, Western Australia received welcome rain, along with fierce winds that will prompt resowing of some canola and lupin area.
A further 5-25 millimetres is forecast for WA tomorrow, and if follow-up rain falls in coming weeks, the state’s crop will be off to a reasonable start.
Queensland remains mostly dry, with rainfall in the week to 9am today being largely insufficient to encourage widespread planting of wheat.
“The dry weather over most of March, April and May has hit the central Queensland sorghum crop hard and, combined with heat at flowering, has seen significant yield and possibly quality impacts,” ADM regional grain accumulation manager Michael Vaughan said.
“The corresponding timing of dry weather has seen wheat area planted also reduced.
“Growers commenced planting early to capture any moisture, but had to pull up in late April.”
Mr Vaughan said chickpea planting at depth has continued as growers chase subsoil moisture.
“Recent rainfall saw 10-20mm across the Central Highlands and up to 40mm in the Northern Highlands north of Clermont, which will assist planted crops but not see much, if any, further wheat hectares planted.”
Excellent pasture conditions, rapidly developing dual-purpose canola and cereal crops and buoyant cattle and sheep prices have already cut demand from feedlots.
On the northern slopes of NSW, Stewarts Grain Trading trader Robert Quinn said demand for grain was minimal, and likely to stay that way over coming months with pastures and fodder crops in plentiful supply, and a good grain crop developing.
“A lot of people in the hills with livestock have barley and wheat crops in, and there’s really quite a large cereal plant for around here,” he said of the Upper Gwydir Valley and surrounds.
He said while trains coming via southern NSW were still bringing grain to railheads between Narrabri and Moree, a switch to road freight seemed likely as demand waned.
However, feedlots on the Darling and Western Downs of southern Queensland are expected to keep sourcing interstate grain arriving by ship out of the Brisbane free-on-truck market.
“It’s starting to work from south to north by road now into northern NSW.”
“The big guys are pre booked and aren’t at capacity, there’s zero drought feeding, and smaller feedlots have closed up.”
“People that thought they were covered up to June and now covered to August.”
Mr Quinn said uncertainty throughout meat markets as a result of COVID-19, as well as the big downward revision in new-crop prices because of the improved seasonal outlook, had reduced buying and selling interest in large parcels of grain.
“There’s no demand from consumers on new-crop, but last week a few started to have a look at it.”
“There’s a lot of uncertainty.”
Growers are being shown on-farm new-crop prices lower by around $150-$200/t than they were seeing during the drought, and are therefore not inspired to sell.
“We’re getting growers selling a truckload of barley and wheat here and there, but it’s small volumes.”
ASX wheat, barley narrow range
ASX current-crop barley sat within a $1/t range all week, settling yesterday at a high for the week of $246/t.
New-crop barley traded within a $2/t range, settling yesterday at $230/t, $2 off its high.
The trading range for eastern (WM) ASX wheat has also been small, with current-crop and new-crop futures peaking on Tuesday and settling lower yesterday.
Current-crop July wheat futures yesterday settled at $347.50/t, and new-crop January 2021 at $300.50/t, both lows for the week.
Cottonseed late and drifting
Current-crop cottonseed values fell approximately $10/t lower on lack of demand amid limited trading activity.
“Most gins now are operating, although they are four weeks later than usual in northern NSW,” Woodside Commodities manager Hamish Steele-Park said.
Cool late-summer and autumn conditions appear to have caused lower-than-normal seed yields.
“Delivery June/July 2020 cottonseed was nominally offered $580/t ex Moree, $575/t ex Namoi Valley, $555/t ex Macquarie Valley and $535/t ex MIA.”
Uncertainty about 2021 conditions in respect of cattle supply and market factors such as beef demand and China trade has buyers sitting away from the new-crop 2021 market.
Gin-spread 2021 delivery cottonseed was around $5/t cheaper this week, and quoted nominally at roughly $325/t ex Moree and $310/t ex Namoi Valley.
The Delivered Downs gin-spread 2021 sell price was quoted in the range $355-$360/t.
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