Feedgrain Focus: Export push lifts northern wheat

Liz Wells September 2, 2021

This crop of barley at Muckadilla in Queensland’s Maranoa district is likely to be harvested this month. Photo: Michael Vaughan, ADM

Feedgrain Focus:  Export push lifts northern wheat

A LATE-SEASON run on export accumulation has lifted values for northern wheat by up to $15 per tonne in the past week, and barley has also firmed as the market starts to process the likelihood of a two-stage harvest.

Southern markets have traded mostly sideways in the past week as consumers see above-average yield potential from most crops in higher-rainfall areas countering below-average prospects for pockets of the Mallee and south-western New South Wales.

Meanwhile, panamaxes and handy-size vessels booked some months ago are continuing to load wheat and barley ahead of end-of-season maintenance shutdowns at some ports.

As exporters scramble to get grain to ports to load on the last boats of the season, traders report trucks have become very difficult to book to cart from on-farm storages to up-country consumers, and this has buoyed domestic pricing.

Nearby New-crop
Barley Downs $302 up $4 $300 up $5 Jan
Wheat Downs $365 up $15 $342 up $7 Jan
Sorghum Downs $302 up $2 $290 steady Mar-Apr
Barley Melbourne $292 steady $300 steady Jan
Wheat Melbourne $372 steady $368 steady Jan

Table 1: Indicative delivered prices in Australian dollars per tonne.

Northern split

The realisation that harvest is going to take place in two or more parts  has started to affect the northern market, as feedlots continue to book early barley and exporters step up for early wheat.

The harvest of both crops is under way in Central Queensland (CQ), and will move into the Maranoa and Western Downs later this month before edging south to the New South Wales border and east to the Inner Downs in October-November.

After that, an enforced break of a few weeks might be seen as later-planted crops south of Moree and on to the Liverpool Plains mature after an unusually wet winter.

“Wheat left on farm is H2 or better, and the premium for protein is rolling into January as the exporters accumulate in Brisbane,” one trader said.

Queensland current-crop stocks are down to a bare minimum, and traders report some NSW grain is being road-freighted to railheads in Queensland to fill trains bound for the Port of Brisbane.

“Our thoughts are there could well be a soft start to harvest if there’s some rain about, and that’s why stuff is going straight to port on trucks and trains.”

Trade sources report domestic consumers are likely to increase their coverage once new-crop becomes available, and are quietly confident that enough low-protein or weather-damaged grain will present in the early stages of harvest.

This belief has been stoked by the Bureau of Meteorology’s latest seasonal outlook, which points to above-median spring rainfall for eastern and South Australia’s grain-growing regions.

Broun and Co trader Charlie Coventry in Armidale said barley and wheat values have firmed in the past week.

“They’re both up, and wheat more so in the north,” Mr Coventry said.

“An increase in value has pulled a bit more grain out, and the drawing arcs are widening a little.

“There’s carryout of all commodities, but we’re not swimming in it.

“The reason the market has notched up is the dryness in Canada, and demand for our protein wheat into Asian markets, coupled with less old-crop in the market.

“There are not as many big parcels of grain around as there were.”

“The other thing that’s becoming current is we’re nearing our transition to new crop, but it won’t be an early harvest, and if the start date drifts back, it will have quite a big impact on consumer demand.

“Depending on the start date, it could create a bit of a squeeze.”

In the week to today, the only big rain in the northern region fell in CQ, where Capella got 68 millimetres and Clermont 42mm.

Sufficient subsoil moisture to finish the crop can be found in plenty of paddocks in Queensland and central and northern NSW, so Mr Coventry said timing of harvest rather than volume was of more concern to consumers.

“The domestics can afford to be complacent by nibbling away month by month.

“Looking to new crop, there isn’t a huge amount of enthusiasm for them to get active just yet.”

“There’s nothing to cause them a whole lot of anxiety.”

Faba beans at $330-$350/t on farm are attracting reasonable interest from graziers keen to pile some extra nutrition into their sheep and cattle which continue to sell at record prices.

“There’s going to be a carryout of fabas, and they’re cheap…so keeping animals fat on cheap pulses makes sense.

“The economics have never been better.”

Sorghum of varying grades continues to price into domestic poultry and pig rations, but barley remains the preferred grain for most feedlotters.

Spring hits in south

Spring arrived this week in no uncertain terms and maximum daytime temperatures of around 25 degrees Celsius, and more, in places in south-west NSW, north-west Victoria and parts of the SA grainbelt will trouble crops already in need of a drink.

Link Brokering principal Dion Costigan said the warm and dry weather was of concern.

“From Sea Lake and south is still fairly reasonable, but north of there…some crops are already toasted.

“There’s a significant difference on how they were looking a week ago.”

Mr Costigan said even growers with good yield prospects were holding off selling current crop and new crop now that up-country markets had rallied by up to $30/t in the past month.

“There are bits and pieces being traded but most of the growers have gone to ground.”

In the barley market, 60,000t cargoes bound for Saudi Arabia are continuing to load out of Port Kembla, and smaller vessels are taking barley from southern Australian ports to mostly Asian destinations bar China.

However, Australia is loading big cargoes of wheat — up to 70,000t — for China, and slightly smaller ones for mostly South-East Asian customers.

“Export parity is propping up domestic feed.”


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