Wheat on SA’s southern Yorke Peninsula being sprayed this week. Photo: Crop Smart

A PULLBACK in buying for drought feeding has allowed southern barley prices to soften by around $5 per tonne in the past week.

With late-season exports mostly reshuffled to Western Australia or east-coast ports, this has seen selling interest outweigh the buy side for the first time in months.

Those with sheep and cattle are still hand-feeding stock in parts of South Australia, Victoria and southern New South Wales, and are tipped to be back in the market by August to get them through to what everyone is hoping will be good paddock in spring.

In the northern market, accumulation for bulk barley cargoes out of Brisbane and Newcastle has supported prompt values in the face of limited consumer buying.

Limited grower selling is supporting the wheat market, where global values are under pressure from the Northern Hemisphere’s new crop.

Table 1: Indicative prices in Australian dollars per tonne.

North exports barley

GrainCorp’s Carrington terminal in Newcastle and Fisherman Islands terminal in Brisbane both have barley cargoes going out this month.

This reflects the northern region’s comfort based on current-crop stocks, and confidence that a big new crop is coming.

However, some parts of the north could do with a drink, and yield potential for cereal crops in parts of southern Queensland’s western Downs has dropped from a bumper five tonnes per hectare to 4t/ha, which is still above average.

“The market’s a bit firmer this week on the back of growers being stubborn and not letting much go,” one trader said.

“We’ve had warmer days and winds, and we’re going to need rain in late July or early August to keep up the yield potential.”

Cottonseed delivered Downs is trading at around $470/t, which is currently around $40/t too high to engage buying interest from China.

“We have it at five-percent inclusion, and we’d like to lift to 10pc, but it’s just too expensive when you look at the price of other inputs,” one source in the feedlot industry said.

Cargoes of barley booked to load out of SA and Vic may continue to swap to Newcastle and Brisbane or Western Australia up to September if the northern market continues to trade at minimum $30/t discount to the south.

Southern market split

Like much of SA’s growing regions, Vic’s Mallee, and the outer slopes and plains of south-west NSW are having a late and patchy season.

However, the Griffith market which centres on Baiada’s Hanwood poultry operation has dropped around $20/t over the past month.

This reflects confidence in the season from roughly Forbes north, and growers in central and south-central NSW letting go of some current crop.

“That Griffith market is drawing grain from up into the Central West, and it’s dropped $20,” one trader said.

“A lot of Central West growers were looking south for some better prices.”

The Griffith ASW prompt market is currently bid around $335/t, down from its traded highs of $360/t in early June.”

Australian wheat values are seen as around $10-$15/t over export parity, and shipping stems indicate those with supply chains including rail are keeping the volume ticking over, largely to utilise their assets.

SA crops mixed

Production prospects remain far from certain in SA, and east into the Mallee on both sides of the Murray River.

AW Vater & Co principal trader Kim Vater said a “very timely” 10-30mm of rain for most places south of Crystal Brook in the past day or so will keep crops going for this month and into August.

The double-digit rain extended to the southern port of the Eyre and Yorke peninsulas, and the South East has also had some handy rain.

Having seen crops across SA in recent weeks, Mr Vater said Yorke Peninsula’s Arthurton and Minlaton districts, and the Vaters’ home district of Saddleworth were showing the best of the season.

However, SA’s drought is far from over.

“The South East is pretty good, and the lower Mid North is not too bad, but the upper Mid North, parts of EP, and the Riverland and Mallee are awful,” Mr Vater said.

Consumers appear to be well covered now that exporters with assets in SA have rebooked cargoes to load from eastern or WA ports, releasing barley into the local market.

“Now the demand has backed off, and people have probably got enough grain to get them through to the end of July or into early August.

“People are getting tight on money, but they’ve still got to feed their animals.”

While hopes are high that pasture and crops sown for grazing will be ready to support cattle, ewes, and finishing lambs from September, Mr Vater said graziers may be back to top up from the grain market ahead of harvest.

“Everything’s late, and there’s still a lot of brown around.

“We’re going to need an exceptionally good spring for this crop.”

Of some comfort is that growers and bulk handlers in NSW generally have ample wheat and barley stocks for domestic needs to carry into new crop.

Grain Central: Get our free news straight to your inbox – Click here