DESPITE supply-side pressure as the sorghum harvest gathers pace, prices for feedgrain in the northern region have firmed in the past week, while southern values have eased.
This reflects some willingness to meet the market now that growers are booking backloads of fertiliser and dropping off loads of grain on the out run.
While sources say trade volume has increased in the southern market, demand has edged ahead of supply in the north to lift values.
|SFW wheat Downs||$395||$395|
Table 1: Indicative prices in Australian dollars per tonne.
Limited selling in north
A run of hot days has seen the sorghum harvest gather pace across southern Queensland and northern New South Wales.
Buoyant export demand from China has seen the market rally $5/t in the past week, despite the red grain now pouring into bulk-handling depots and container-packing sites.
Yields are being reported at 3-6t/ha, and are expected to consolidate at the high end as harvest moves east and into heavier country on the Downs over the next four weeks.
Bumper sorghum crops of 7t/ha or above are expected for some growers.
Scattered storms have slowed harvest in a few locations, with registrations in the week to 9am including Jondaryan with 52mm in Queensland, and 25mm at Quirindi in NSW.
However, most farms have had no rain for the week, and dry topsoil is of concern for many districts as the winter-crop planting window nears.
Early oats will be planted from next month by some mixed-farming operations, and feedlots who can switch out of barley are preparing to do just that.
One trade source said the below-average test weights of barley and higher-than-normal amount of admixture are adding to the appeal of transitioning to wheat.
“There’s husk, there’s straw, there’s stuff that didn’t thrash at harvest, and a lot of crops have lodged.
“It’s slow going for the feedmills, and it’s no cheaper than wheat.”
Consumer demand is running ahead of supply, with the possible return to dry conditions spooking some in the market.
“People are wanting to book May-July business, and we know the grain’s there, but it’s hard to get the volume you want.”
“People in the north are selling less than normal, and growers and the trade are hand-feeding the domestic market,” one trader said.
Barley is not being exported in anything bar a handful of containers in the north, and one source said the market was sitting at around $40/t above export parity on a delivered Downs basis to reflect inelastic demand from some longfed cattle operations.
Volume picks up in south
An increase in farmer engagement and sales out of the track market have put some supply-side pressure on southern pricing.
GeoCommodities broker Brad Knight said prices for higher grades of wheat appeared to be supported by increased demand, primarily from container packers.
“The market’s firm and a bit of trade is being seen on the higher grades.
“Everything’s firmer in the track market, and there’s a bit more depth in it than we’ve seen for a while.
“There’s still a gap between the delivered market and the system, which indicates some people might be looking to buy in the track market and still have a margin.
“Farmers have engaged a bit, and there’s an uptick from them with the firmer pricing.”
Another source said wheat quality being better than expected has lifted volume on milling grades for export.
“There’s some selling of depot-held grain going on,” the source said.
While barley in the delivered Downs market is trading at $10-$12/t over SFW wheat, the southern market has put it at a hefty discount.
This has killed largely killed grower interest in selling barley.
“Growers are holding their barley; there are rumblings about China coming back, and that’s a consideration for some growers that have tonnes to sell.”
The source said the wheat and barley held at depots and on farms well away from port is pricing into the up-country market because stocks are ample at sites closer to the coast.
“Wheat in NSW and into southern Queensland is priced to stay in the country for lower-protein APW and below.
“High-pro APW and Hard wheat works into an export pathway, whereas feed-type wheats have dominated Q1 and Q2 cargoes.”
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