Cotton

Failing paddock feed pushes graziers into cottonseed market

Henry Wells, April 17, 2018

DEMAND from graziers in New South Wales is pulling cottonseed away from gins as fast as they can extract it to buffer a worsening pasture outlook, as dry takes hold across the state.

Cottonseed fills a need for feed as dry conditions persist.

Trade sources report hundreds of truckloads of the fuzzy white seed are loading at gin yards bound for grazing properties where it will be used to supplement paddock feed.

The Queensland and NSW cotton crop now being picked is expected to generate more than one million tonnes of cottonseed.

Traders said the grazier inquiry was needed in the face of lacklustre to non-existent export demand.

While Australia’s Gene Technology Regulator had provided the means for clearance of all documents to facilitate export of Bollgard III cotton to China, Grain Central understands hoped-for demand for Australian cottonseed into feed and crush and feed markets in China had not yet materialised.

Australian oilseed crushers, cattle feedlots and dairy users provide the underlying demand base for cottonseed, while domestic grazier demand switches on and off, depending on seasonal conditions.

Cottonseed has traditionally traded at a significant premium to wheat, but is now priced at a discount due to thin demand and ample supply.

Calm in feedlot grain market

Traders said southern Queensland’s sorghum harvest was 90 per cent done, and while the early crops had problems with poor grain size, later-harvested crops typically met export standard, and most suitable sorghum was now earmarked for export sales to China.

Sources said feedlots have been buying wheat as their main feed ingredient in rations this year, supplanting both sorghum and barley.

Competition for barley to fill export orders for shipment out of Victoria has virtually eliminated feed barley from feedlot rations in the north, against the background of low stock levels Australia-wide and critically low stock in NSW and Queensland.

As a lack of rain had kept remainders of grower grain stocks away from the market, feedlot buyers minimised their risk by covering their grain requirements some months ago for April, May and June delivery, and are now weighing up their buying options for July-September coverage.

 

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