Feedgrain Focus: Values firm as crop concerns build

Liz Wells July 30, 2020

This wheat crop near Moree is one of the vast majority in NSW set up for a big spring. Photo: Oscar Pearse

WHEAT and barley traded steady to as much as $10 per tonne higher this week to reflect concerns about dry conditions in parts of the Victorian and South Australian crops, and the likelihood of limited production in Queensland.

Countering this is the New South Wales wheat and barley crop, which is looking excellent in nearly all areas, and received welcome falls in parts.

Registrations in the week to 9am yesterday included: Condobolin 28 millimetres; Coonamble 14mm; Cootamundra 44mm; Dubbo 33mm; Gunnedah 20mm; Manildra 55mm; Temora 19mm; Walgett 23mm, and Young 50mm.

Many areas of NSW missed the rain, and crops in Moree, Mungindi and Narrabri are starting to look for a drink, but only got 3-6mm in the town gauges.

Handy rain in parts of Western Australia again missed many of the districts in the central wheatbelt and Great Southern that need it the most, while registrations in South Australia and Victoria were minimal, and patchy falls on Queensland’s Darling Downs brought 10-25mm to some parts, and nothing to others.

Also of concern are recent frosts in SA, which may have done some damage to heads developing in wheat and barley stems.

This week Last week Change
Barley Downs August $350 $350 Steady
Barley Downs Jan $270 $265 Up
Barley Melbourne August $270 $270 Steady
Barley Melbourne Jan $250 $245 Up
Wheat Downs August $400-$405 $400-$405 Steady
Wheat Downs Jan $305-$310 $300 Up
Wheat Melbourne August $355 $355 Steady
Wheat Melbourne Jan $295 $292 Up
Sorghum Downs August $320 $310 Up
Sorghum Downs Mar-Apr $270 $270 Steady

Table 1: Indicative delivered grain prices in AUD per tonne.

Victoria, Queensland of concern

Robinson Grain wheat trader Jock Benham said Australian cash prices had edged up, despite the stronger Australian dollar and weaker US wheat futures.

“The cash market’s held up fairly well now that Victoria is starting to look for rain in some areas,” Mr Benham said.

The nearby shipping stem shows exports have slowed markedly to indicate old-crop reserves of grain on farm, in warehousing and at port have run right down.

“We all knew old-crop was getting low, and all there is is a little bit of trade coming from the market, and a little bit of consumer demand.”

Federal Minister for Agriculture David Littleproud said in his address to the AGIC 2020 Live event this morning that “the drought obviously still isn’t over in many parts, despite the fact we’re looking at a better year this year”.

“It is very pleasing to see some of the winter crop that’s out there, but some are not as far advanced as what I would have liked. “

As the Federal Member for Maranoa, Mr Littleproud said crop conditions within his electorate in southern Queensland were varied.

“Parts around Goondiwindi and Roma were somewhat disappointing, whereas the Inner Downs looks quite good.”

Barley buys interest

Delta Agribusiness Armidale-based broker Tom Vanzella said talk about dry conditions in SA, Queensland and western Victoria had sparked interest in booking new-crop barley in particular.

“It feels like the feed complex is firming up, despite this latest rain, and barley has found a lot more friends,” Mr Vanzella said.

“End users are predominantly using barley now in south-east Queensland, and everyone’s lifting their sights to have a look at it.

“We’ve seen more interest from the trade in the past couple of days.”

Growers in NSW are also considering advancing their forward sales of grain now that on-farm bids have firmed to more than $200/tonne for barley and roughly $250/t for wheat , especially if they have crops with yield potential nudging 5 tonnes per hectare.

“A lot of growers had the idea they would store barley, but if the price lifts enough, they might forward sell some.”

NSW wheat growers are considering pricing strategies for a big crop with potential for some downgrading caused by either a damp finish, which could push some loads into feed, or a dry finish, which could produce high screenings, and boost receivals into off-spec protein segregations.

“Downside risk has been a factor in growers’ minds.”

With each passing week, feedlotters in southern Queensland with limited new-crop potential around them appear to be looking south of the border for coverage from as early as mid-October, when the NSW harvest is expected to hit its straps.

CQ harvest close

Harvest of the central Queensland crop is expected to start in coming weeks.

A lack of finishing rain for most CQ crops means its wheat and barley are likely to be absorbed by feedlots and feedmills in central and north Queensland, and container exports.

While export slots for bulk cargoes were booked last month ex CQ ports, vessels are yet to be nominated.

“Walgett and places out west will have to do some heavy lifting if CQ doesn’t come to much,” Mr Vanzella said.

New-crop barley delivered Moree has traded at $225/t, which points to an on-farm price of more than $200/t as the trade starts to accumulate in readiness to supply the feedlot market on or north of the border.

In Victoria, Riordan Grains general manager Mark Lewis said limited recent rainfall for the crops which started off with big potential has growers easing back on their sales programs.

“We’ve had a drier couple of months than we were expecting, and farmers are not necessarily having to sell as much as they thought they would,” he said.

“There’s a little bit of demand out there to push things to be a little bit firmer.”



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