An early sown crop of trial wheat near Wagga Wagga in the Riverina district of southern NSW has jumped away after recent rain. Photo: Dr Felicity Harris

THE MUCH-ANTIPICATED arrival of rain in South Australia and Victoria over the weekend has seen prices soften and the southern new-crop  market kick into gear.

Most SA and Vic farms had 15-40mm, enough to germinate dry-sown crops, and with another 10mm or so forecast for early next week, prospects for new-crop wheat and barley across Australia are consolidating.

As export demand dwindles and the drought-feeding market prepares to wind down, consumers are in no hurry to buy, especially with an uptick of grower selling expected when the financial year starts on July 1.

Table 1: Indicative prices in Australian dollars per tonne.

Northern sales increase

Northern growers have done some selling of on-farm or warehoused wheat and barley in the past week in response to consolidating prospects for their own winter cereals, now mostly in the ground.

As Northern Hemisphere new-crop weighs on global markets, consumers appear happy to sit on their hands, although some have increased cover in the past week or two.

Wheat is in greater demand than barley, with its abnormally low premium making it attractive to feedlots looking for higher energy as mid-winter approaches.

“With wheat only around $10 more, they’re not including barley in their rations,” one trader said.

Corn is also in demand, and trading at around $370/t ex farm Darling Downs.

“You can put corn through cattle to warm them up.”

The trader said some pent-up demand from consumers was ready to jump on offers from growers on grain delivered July-August.

“There is some more grower interest in selling; if they sell now, they know they’ll get paid in July.”

A number of consumers are seen as covered up to new-crop, which is expected to become available in southern Qld in October.

In northern New South Wales, Stewart Grain trader Robert Quinn said growers have been active sellers in the past two weeks.

“They’re more comfortable on letting current crops go,” Mr Quinn said.

“Everything’s looking pretty good around here.”

“It feels as though the consumer is covered on the nearby and deferred, some out to September.

“Feedlots are full, and the margins are good.”

Mr Quinn said truck availability has become a little tight, with fodder being carted from north to south, and cotton being carted from farms to gins.

“Trucks have tightened up.”

Some cottonseed has also been moving south, and as far as SA and Vic for first-time and repeat users, as drought feed.

Woodside Commodities managing director Hamish Steele-Park said cottonseed values remain rangebound in the north at $420/t ex gin Gwydir Valley, and around $465/t delivered Downs.

“While China’s export demand evident, it is below current ex-gin market levels,” Mr Steele-Park said.

“US seed is still at least US$20/t cheaper into Korea and Japan on a CFR basis.”

In the Riverina, values are A$460/t ex gin, and $30/t less in the Macquarie Valley.

“Moving forward, all eyes are on China, and its appetite will determine future price direction to a large extent.”

Rain buoys south’s outlook

Most parts of SA and Vic’s cropping, grazing, and mixed-farming regions got desperately needed rain over the weekend.

With usable green feed only weeks away, it has taken the heat out of the fodder market, and put some downward pressure on prices, now more reflective of global values than the drought premium.

Most southern growers have sowed all their crop dry, and many crops have germinated already on the rain that fell in recent days.

“This rain has just meant the market’s not going to get dearer,” one trader said.

Frost has settled in some areas of the grainbelt from Vic to Qld, and fog and showers have helped to counter its drying effect.

The trader said further rain next week will be needed to entice Wimmera and Mallee growers to the forward market, while south-west Vic growers were already considering new-crop options.

“There are certainly growers kicking tyres.”

Pinion Advisory broker Brad Knight said the Vic rain has helped to bring bids and offers together, and liquidity has picked up.

“It was already trading lower last week in the big end of town ahead of the rain,” Mr Knight said.

“Sentiment has definitely shifted to something more positive after the rain.”

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