ASW WHEAT has held its value in an otherwise softening market which is reflecting offshore moves and largely bright prospects for Australia’s new-crop production.
While barley and SFW wheat prices are under pressure in the global complex from new-crop Northern Hemisphere corn, current-crop ASW wheat appears to be holding its own, despite the uptick in grower selling.
Trade sources report increased activity in new-crop wheat sales, with SFW grades starting to trade in the north, and some action around APW multigrade in the south.
Rain-related disruptions to coast-bound rail movements in New South Wales have increased the demand for trucks to deliver to domestic consumers and export terminals, but have not yet had an impact on prices.
|SFW wheat Downs||$410||$420|
|ASW wheat Melbourne||$425||$425|
|SFW wheat Melbourne||$415||$420|
Table 1: Indicated delivered prices in Australian dollars per tonne.
Dry week in north
Very little rain fell in the week to today in Queensland and New South Wales, which has allowed cotton picking to progress and grain to be outturned from all-weather sites amid ongoing boggy conditions.
The dragged-out cotton harvest, coupled with NSW’s rail issues, is keeping road transport in tight supply.
“Cotton ginning is progressing well, but a long season is anticipated due to the late and slow start, and it is likely to push out to Oct-Nov in some valleys,” Woodside Commodities broker Hamish Steele-Park said.
“Logistics is playing havoc, whether it’s getting containers, finding trucks, and now rail lines being cut.”
Northern cottonseed markets drifted lower this week, with Moree values at $330-$340/t, depending on delivery months, while the Namoi Valley is trading at around $320-$325/t, and the delivered Downs market for Jly-Sep is $400/t.
“Domestic demand is subdued, but there is still some export demand at a price.”
Big stocks of mostly SFW wheat remain in grower and trader hands across much of NSW, and a new-crop market for it is taking shape at around $410/t delivered Downs for January onward.
Feedlots using all or mostly barley appear to be looking at upping the inclusion rate of SFW wheat if it comes under the price pressure everyone is expecting should the northern harvest shape up to be another low-protein one.
Ebbing export demand supports south
As wheat and barley-buying for the current shipping year tails off, traders are seeing the spread between ASW and SFW wheat widen in response to Asia’s waning demand for lower grades.
“That’s one thing has changed: cheap corn is working in their rations, and the market for our feed wheat is being shelved,” one trader said.
“You’re going to see a weight of feed wheat carry into new-crop, and if SFW is held back, it should become more of a domestic play.”
While ASW can go into milling blends, SFW now appears to have limited export demand, but barley is still in reasonable demand from Middle Eastern markets in particular.
Growers are booking a small amount of new-crop APW wheat tonnage at around $435-$440/t for Jan-Feb delivery Melbourne, and around $15/t less for ASW.
At Swan Hill, Pearson’s Group director Darren Pearson said some growers in the Mallee were looking for another rain to shore up yield prospects ahead of spring.
“Growers in the Mallee have been selling a bit, but not as much I thought they might,” Mr Pearson said.
“They’re looking for another rain, but we did see a bit of selling when price was over $400/t local silo in the Mallee.”
Grain from south-western NSW and western Victoria continues to make its way to domestic consumers and export in the Port Adelaide zone, while grain from the Riverina is finding demand from the Victorian consumer and export.
In the southern NSW cottonseed market, Mr Steele-Park said values have fallen over the past two weeks, and slipped to $390/t ex MIA gins before bouncing back to a little over $400/t this week.
“Export demand from China has backed off with the recent global oilseed sell-off, and DCT values are approximately $545/t at the moment.”
A number of locations across the Victorian, Western Australia and South Australia grainbelts received 5-15 millimetres of welcome rain, and more in places, in the past week.
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