Markets

Feed grain update: Growers have some tough decisions to make

Luke Walker, Alliance Grains, August 23, 2016
Luke-Walker-alliance-grains

Luke Walker, Alliance Grains, Toowoomba

Australian grain prices have been belted this month as international prices fall and our grain becomes uncompetitive for export buyers.

Domestic demand for grain has also been easing as feedlots and other buyers watch the market fall in their favour.

Prices have fallen below $200 on-farm for both old crop and new crop harvest grain.

Growers have some tough decisions to make on the marketing front. For now they are showing resistance to selling into a falling market.

Creating more uncertainty in our markets is the huge wheat and barley harvest across the Northern Hemisphere, where above average yields and bumper crops are being recorded, and production is outweighing current demand in weakening global markets.

France is experiencing a wet wheat harvest with some flooding, which has caused downgrades to wheat, which is now being exported at low prices into world feed grain markets.

Corn in the USA this year looks to be a record-breaking crop with the potential to produce 390 million tonnes. Prices are at 10 year lows, again due to more supply than demand.

Lower corn prices are putting downward pressure on Australian sorghum prices. Sorghum currently delivered Brisbane for September is trading at $224.

Sorghum crop below Elders Killara feedlot near Quirindi.

Sorghum crop below Elders Killara feedlot near Quirindi.

Australian crops are in good shape with forecasts our wheat production at 29 Mm/t. Compared to last years at 23 million tonnes, this year’s wheat crops will be one of the biggest grown in recent years.

Prices for new crop are coming under pressure with wheat for November-December delivered feedlot on the Darling Downs trading at $228.

Chick Peas have definitely been the crop of choice from Central NSW to Queensland, and although prices have dropped by $150 in the past month back to $790 delivered Downs for November, the sentiment is positive from growers as they monitor their crops and look to lock in forward prices.

Good rain forecast for Queensland and northern NSW this week will only help yields, although Central NSW and further north would like a few weeks of dry weather as the risk of crop damage intensifies with the wetter then normal winter.

Current market

Current markets on a delivered feedlot basis for August are trading at the following numbers: delivered Darling Downs $214 sorghum delivered; Feed wheat trading at $228; Barley $216; Liverpool Plains is very steady with limited trades, with sorghum delivered $200 wheat $235 and barley $195; Southern NSW in Riverina area wheat delivered $210 and Barley $170, Victorian Goulbourn Valley wheat prices has held values pretty well at $235 and Barley $190.

  • Prices quoted in this column are of an indicative nature only to illustrate trends and do not represent a definitive buy or sell price at a given point in time. For specific prices for your region contact the author at [email protected] or 0427 372 793 or twitter @lukewalker711

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