Feedgrain Focus: Prices firm as coverage extends

Liz Wells, March 4, 2021

Zac Wilmott of Blackville in northern NSW in his crop of Pioneer Brand A66 sorghum. Photo: Pioneer Seeds Aus

CONSUMERS in eastern states have started to book coverage into June and beyond as expectations build for stronger pricing into the back half of Australia’s marketing year.

This is based on prospects building for solid export demand for Australian wheat and barley beyond June, and an inverse into new-crop Black Sea grain which will be smaller than earlier thought now that Russia’s grain export tax is in place.

On sorghum, 13,000 tonnes in bulk is due to load in Brisbane by early April, and trade buying has now switched back to the container market.

This week Last week Change
Barley Downs March $282 $280 Up
Barley Melbourne March $260 $257 Up
Wheat Downs March $318 $312 Up
Wheat Melbourne March $312 $310 Up
Sorghum Downs March-April $340 $330 Up

Table 1: Indicative prices in AUD per tonne.

Dollar, freight temper rises

The Australian dollar and bulk freight rates are both firming, and these offshore factors have tempered price rises for Australian grain.

However, grower caution about not overselling when trade shorts appear is largely responsible for holding up prices.

“The market’s very steady and very stable,” Wilken Group trader Andrew Kelso said.

“There’s plenty of buying interest from the bulk and container markets, and there have been a few consumers looking further out on the curve.”

Market talk is that NSW and Victorian growers have sold just about all their canola, and are now pushing out a load or two of wheat, barley and pulses to feed the farm-port-farm cycle which is backloading fertiliser ahead of winter-crop planting.

The trade has indicated South and Western Australia will run its grain stocks down to the wire by October-November, and this has pushed additional export interest to eastern port zones.

“NSW and Victoria is where they’ll come looking for it in the back half of the year.”

“The grain is still there I think…and most unsold grain is on farm.”

Growers limit selling

Godde’s Grain trader Peter Gerhardy said continuing strength in livestock prices meant mixed farmers were hanging on to grain in case autumn turned dry.

“There’s still quite a bit on farm, which is typical for this time of year.”

“The lamb and the cattle job are both still very good, and they’re worth feeding with grain.”

“In the Riverina, April can always be a hard month, and the farmer is aware of that.”

He said demand for grain around the NSW-Victorian border was coming from exporters and container packers, even though boxes were still difficult to get due to ongoing domestic and offshore logistics issues.

“The domestic guys are out there in the market, but it’s the trade more than the consumer that’s active.”

“From where I’m sitting, I can’t see the market falling away big-time.”

Goldstar Commodities Goondiwindi-based broker Geoff Webb said growers were looking to sell now, whereas traders were looking to book grain for deferred delivery.

“Consumers are pretty well covered; it’s the trade that’s looking.”

The prompt market on the Darling Downs is said to be trading in modest amounts, with the market varying dependent on location and volume.

“Growers are doing a good job of sticking to their price targets.”

A small percentage of the Downs and Queensland-NSW border crop has been harvested, and higher-yielding and later-planted crops have now started to hit the bins.

“The sorghum harvest is going slowly and sporadically; we’re getting into the better stuff now.”

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