VALUES for nearby and new-crop barley have dropped a few dollars in the past week in the northern market, but continue to rally in the south as growers remain reluctant sellers and trade longs get harder to find.
The global shortage of high-protein wheat continues to drive Australian values higher, but prices in the north have eased in the new-crop wheat market now that stockfeed millers feel confident plenty of barley will be hitting the market from October.
Provided the eastern Australian harvest is a dry one, stockfeed millers are expected to stay on barley at maximum inclusion rates once new-crop becomes available.
However a wet or unusually low-protein harvest would see wheat displace barley in some cattle, pig and poultry rations.
Wheat and barley crops are thriving in most areas, and rain this week across south-eastern Australia has provided a welcome top-up ahead of spring’s arrival next week.
While most crops in central and northern New South Wales have good subsoil moisture beneath them, growers in southern regions are mostly looking for another soaking rain or two to ensure crops can maintain yield potential.
|Barley Downs||$298 down $2||$295 down $5|
|Wheat Downs||$350 up $5||$335 down $3|
|Sorghum Downs||$300 up $5||$290 up $10|
|Barley Melbourne||$292 up $7||$300 up $10|
|Wheat Melbourne||$372 up $10||$368 up $8|
Table 1: Indicative delivered prices in Australian dollars per tonne.
North navigates border issues
Early cereal crops in Central Queensland are already being harvested and accumulated for bulk export, while Western Downs and far northern NSW crops should be hitting the bins in late October.
The global market for the last of the old-crop wheat in the north is strong as flour millers ingest the reality of a drought depleted wheat crop from the Canadian Prairies and US Great Plains.
“It’s all driven by export wheat, and barley is following, although the spread between wheat and barley is starting to widen,” Smithfield Cattle Co commodity buyer Brett Carsburg said.
“We can export wheat at these numbers; barley might be a little overpriced.”
“The old-crop wheat Australia has left is all good quality, and it’s going straight into that high-protein export market.”
Mr Carsburg said the strength of the nearby wheat export market was evidenced by its big inverse into new crop, whereas the barley inverse had already disappeared.
Logistics are also affecting grain pricing this week, and adding up to $5/t the cost of bringing grain from NSW into Queensland.
Strict controls in the face of NSW’s COVID outbreak mandate drivers being tested for the virus at least once a week, having at least one COVID vaccination, and carrying necessary documentation from the Queensland Government and their company.
On top of time taken waiting to get through border checkpoints – up to one hour in some cases – Mr Carsburg said the necessary steps being taken to keep COVID at bay in Queensland had affected the trade.
“Freight coming from NSW into Queensland is getting delayed, and the trade is behind on execution.
“Some traders are having trouble securing transport, and that cost of I’d say $2-$5/t is being passed on to the seller or the buyer or both.
“It’s costing the freight companies, and someone’s got to pay.”
Rain makes grain
A front passed over south-eastern Australia this week and delivered some handy falls in places which have bolstered yield prospects as we enter the last week of winter.
Registrations in the week to 9am today include: Dubbo 30mm; Mungindi 21mm; Narrabri 32mm; Peak Hill 46mm, and Young 29mm.
Most parts of the NSW grainbelt got more like 10-20mm, and some districts missed out altogether.
In Queensland, Miles got 16mm and Felton and Macalister 11mm, but most gauges only got a few millimetres at most.
Some sorghum stored on farm is being sold into the Asia-facing containerised and bulk export markets as growers look to make room for new-crop barley, wheat and chickpeas.
Southern growers hold
Most growing areas in South Australia, Victoria and southern NSW had up to 10mm of rain in the week to today, ideally timed for these regions where lighter soils need regular top-ups, particularly in seasons like this with limited subsoil moisture.
However, traders say growers are in no hurry to sell until they can be sure the crop in the ground will achieve at least average yields.
As traders square off their current-crop positions, the lack of grower selling is supporting prices being paid by consumers.
“Wheat and barley are both stronger through a lack of liquidity,” one trader said.
“There’s a fairly big carryout in NSW, and some in Victoria too, but the growers will wait until the crop is well and truly made before they let go of it.”
While wheat values are expected to remain strong based on export parity, a big barley crop is widely tipped to come under supply-side pressure in the domestic market.
“I think barley will get left behind; we look to Saudi and to China to buy our big volumes, and with China not in the market, that will have an impact on feed.”
The trader said increased barley use brought about by a widening discount to wheat would see stockfeed millers chasing canola seed or tallow to boost energy.
“Both of those are horrendously expensive, so we’d like to see some higher-protein wheat available domestically at reasonable prices, but I don’t know if we’ll get it.
Hanlon Enterprises grain trader Shannon Lynch said barley and wheat was continuing its flow to ports from the Riverina and surrounding slopes in NSW, while the last of the current-crop canola was filtering into ROBE.
Mr Lynch said export strength this late in the season was helping to clear out current-crop stocks.
“We’re going Newcastle, Port Kembla and Melbourne, and we’re trying to avoid Sydney.”
The capital is the epicentre of the NSW COVID outbreak, but does not have a bulk grain port.
Mr Lynch said drivers going into Victoria were having rolling three-day COVID tests, and doing all they could to comply with documentation requirements tied to the essential movement of grain and fertiliser.
“It’s a battle, and our drivers have been extraordinary.”
Traders including Mr Lynch said they were busy shifting pre-bought grain from farms and storages, and that wheat values were holding up better than barley.
“Old-crop barley is about $200/t on farm but there isn’t a lot of demand for it just now.
“If growers don’t like the price, they’ll hang on to oats and to barley and put it through their own livestock next year to value-add it.”
Mr Lynch said growers had made good use of two dry weeks prior to this one to spread urea on to thriving winter crops.
“Plenty of urea’s still going out.”
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