FEEDLOTS close to the New South Wales-Queensland border, as well as the flour-milling sector in Sydney, will absorb most of the 6000 tonnes of wheat now making its way to end users by rail from South Australia.
At 102 wagons, the 1.8-kilometre Southern Shorthaul Railroad train has beaten the previous record set earlier this year by one wagon for the longest train in the history of the ARTC network, and was loaded over two days at Cargill’s GrainFlow site at Crystal Brook.
The consignment loaded last week, and was put together by Arrow Commodities.
Traders have said the wheat has been forward sold to feedlots which are too far from Brisbane to capitalise on grain being offered free on truck (FOT) at port.
“That works for feedlots on the Darling Downs, but once you get down to the NSW border, they’re a bit too far from the port to make it work,” one southern Queensland trader said.
While wheat and barley coming into Brisbane by ship has been offered FOT, traders have said grain arriving by train into northern NSW has largely been booked by feedlots with a clear plan about forward coverage.
“We don’t see it in the open market,” another trader said.
Most traders believe feedlots in northern NSW and southern Queensland are covered until the end of next month, when the drought-reduced local winter-crop harvest will hit the market.
“After that, we’ll be looking south for coverage, because there won’t be much coming from up here.”
Reports indicate roughly one quarter of the train’s 102 wagons will be unloaded in Parkes, another quarter of them will travel to a flour mill in Sydney, and the feedlot portion will terminate in Narrabri.