PRICES for feedgrain have changed little in the past week, with some welcome rain in parts of Victoria and South Australia quashing the upside, and ongoing execution issues blocking the downside.
In the northern market, accumulation of top-grade sorghum for export continues, while the poultry and pig markets factor in grain with up to 10 per cent sprouting.
Consumers across eastern Australia are now booking grain for delivery out as far as September as execution difficulties and surprisingly buoyant export values put a floor in values ahead of new crop.
|Barley Downs||$300 steady||$276 down $2|
|Wheat Downs||$332 steady||$310 steady|
|Sorghum Downs||$315 steady||$275 Mar-Apr down $5|
|Barley Melbourne||$275 steady||$275 up $5|
|Wheat Melbourne||$330 down $2||$322 steady|
Table 1: Indicative delivered prices in Australian dollars per tonne.
Sorghum market split
Bulk exports of Australian sorghum are continuing, with the most recent one on its way to Japan from Newcastle, and another due out of Brisbane early next month, with China the expected destination.
Wash-outs based on quality problems have cost some growers dearly when either mouse droppings in samples or sprouting caused by rain on the crop just prior to harvest, or both have been evident.
Stringent receival standards have been enforced at port to ensure grain has met export standards, and some grain knocked back for export has made its way into the stockfeed market.
However, this market is limited, as wheat and barley are still seen as better value than discounted sorghum.
Darwalla is a major poultry producer in south-east Queensland, and feeds manager Gary Heidenreich said the group was using some sorghum with up to 10pc sprouting.
“If you look at SFW wheat, Barley 1 and Sorghum 1, sorghum wouldn’t get a look-in on a cost basis.
“We will look at off-spec sorghum, but ergot is something we definitely don’t want, and mould we don’t want either.”
“We’ve been on a wheat-barley ration since the end of last year, and it’s only in the past two weeks we’ve been using a bit of sorghum in some of our rations,” Mr Heidenreich said.
“We might reduce our barley inclusion by 5-10pc, but 10-20pc in the ration is all we’d go to for off-spec sorghum.”
However, severely downgraded sorghum trading as Sorghum X is yet to find a volume home,
Mr Heidenreich said barley prices were firm, and while wheat has not got any cheaper, it is more accessible.
“Only a couple of weeks ago I was almost out of wheat; now it’s coming in really well.”
Another market source said wash-outs in the delivered Brisbane market have occurred at up to $370/t, but trades were now occurring at around $330, and sorghum with up to 10pc sprouting was meeting limited demand.
“Sorghum 2 is at a $30 discount to that, but the window has opened and shut on that market.”
Sorghum X with greater than 10pc sprouting is nominally trading at $240/t, but nutritionists will are not keen to include any more than a minimal percentage because of its low feed value.
Some crops in New South Wales and southern Queensland have had rain since yesterday, with Forbes on 29mm and Nindigully on 30mm recording the highest registrations.
Prior to this rain, reports from the tail end of the Darling Downs sorghum harvest say unharvested grain had excessively high moisture already, and was going into on-farm driers prior to hitting the market.
Planting ends, rain welcome
In New South Wales, Stewart Grain trader Robert Quinn said execution in the north was still tight, but that could change in the next week or two and bring more grain to market.
“Farmers don’t have extra manpower to load trucks now, but planting’s starting to finish up for a lot of people, and we could see a few growers start to open up bunkers,” Mr Quinn said.
“Barley stocks are tight, but there’s plenty of wheat left.”
In the 24 hours to 9am today, parts of the Victorian Mallee and Wimmera and South Australia’s growing areas have received 3-10mm, which will spark germination in many dry-sown crops.
Isolated patches in SA have had more than 25mm.
In Victoria’s Goulburn Valley, up to 20mm has been recorded, and will help to underpin yield prospects for crops already up and away.
“Prices are pretty steady,” GeoCommodities broker Brad Knight said.
“Liquidity has dried up from farmers.”
Almost all of Victoria’s winter crop has been planted, but plenty of Mallee and northern Wimmera crops have get to germinate.
Mr Knight said the market was keeping busy with execution, and exporters were still accumulating for the back months of the current crop year.
“Consumers are more focussed on June-July, and exporters are more active on July-August.
“Freight remains a constant battle.”
Competitive on export
Flexi Grain pool manager Sam Roache said Australian wheat and barley was still competitive into many Asian and even some Middle Eastern markets, but barley in parcels of several thousand tonnes plus was getting hard to accumulate.
“Dry weather has really slowed down farmer selling, and farmers will hold back if the market’s on the way up.
“Everyone’s looking around wondering where the barley is sitting, and I think it’s gone.”
Shipping stems indicate barley exports will reduce sharply from next month, and the stockfeed market in northern NSW and southern Queensland is booking on-farm tonnage from across central NSW.
NSW has only four bulk grain ports — two each in Newcastle and Port Kembla — through which to shift a massive crop, and Mr Roache said the challenge of getting grain to the port was a factor in the export equation for feedgrain.
“For feed wheat, those prices are as much about buying trucks as buying wheat at $10-$15/t over the cost of execution.
“You’re trying to get all the trucks out of bed.
“Wheat isn’t as competitive as it has been, but it’s still competitive, and barley’s the same.
“We’re still calculating into markets like The Philippines on feed wheat.
“The overriding factor on wheat now is: Can it get out of NSW?”
Western Australian growers have planted their crop in the early part of the window and into good subsoil moisture, with follow-up rain having fallen since planting.
Mr Roache said that made the WA grower the mostly likely to forward sell new crop.
“I think there’s been a lot traded in WA on new crop.
“WA has sold out of their old crop, and they’ve got decile nine moisture and high-decile prices.
“They’ve been engaging mostly on canola, but there’s definitely some wheat trading.”
Cottonseed widely available
Cotton growers’ yield outcomes have risen as picking advanced in 2020-21 crops, some predicting total Australian harvest 2.9 to 3 million bales, around 10pc higher than one month ago.
“Ginning is now under way in all valleys although very late in the north,” Woodside Commodities manager Hamish Steele-Park said.
“Australian seed still is cheaper than US seed into destination offshore markets and this is generating some export interest, but it’s limited.
“Cottonseed values remain very range-bound.”
Prices this week from the sites in the NSW Riverina region were quoted at $365-$370/t ex gin.
Gwydir and Namoi Valley quotes for delivery June and July 2021 were about $345/t ex gin, with Darling Downs delivered seed about $390/t July-August.
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