A RALLY in global values has lifted Australian prices for barley and wheat as exports continue at a cracking pace, and some domestic consumers scramble to complete their coverage for the coming weeks.
Barley remains the preferred grain for most beef feedlots, and major consumers in northern New South Wales and southern Queensland are buying from traders and growers.
On wheat, grower selling into the domestic market is limited, and traders who cannot fit their parcels into export accumulations appear to be the major suppliers.
|Barley Downs Feb
|Barley Melbourne Feb
|Wheat Downs Feb
|Wheat Melbourne Feb
|Sorghum Downs Mar-Apr
Table 1: Indicative prices in AUD per tonne compared with mid-December values.
Mainland Australia’s 2020-21 wheat and barley harvest is in its dying days, with only some pockets of south-western Victoria and South Australia’s South East still stripping late wheat.
Centre State Exports managing director Jeff Voigt said selling from South Australian growers put some pressure on prices during harvest, and executing a big shipment program was now the market’s focus.
“It was a good harvest for most, and grower selling has been steady,” Mr Voigt said.
“During the peak of harvest, we saw a bit more hit the market and pressure on prices, but prices are now steady to firm.
“Growers have now sold what they want to sell.”
Australian Grain Export domestic cereal trader Tim Martin said the overnight rally earlier this week brought about largely by bullish US corn figures had spilled over into the Australian market.
Ahead of the additional tax likely to be imposed on Russian wheat exports from February until June, Northern Hemisphere grain markets have firmed and Australian values are following.
“The international consumer who’s short is more worried than the domestic consumer,” Mr Martin said.
The looming Russian tax has some African and South Asian demand looking towards Australia, despite terminals already being heavily or fully booked into June.
“We’re more restricted by our slot capacity.”
“Every major exporter has a big book on, and the domestic consumer is getting serviced by those mid-tier traders.”
Australian growers have surprised the market by holding grain back from falling or flat markets, and picking spikes in canola and pulse markets as well as cereals to sell modest tonnages.
“Grower selling has been less than what everyone has thought.
“Where export zones are firing, growers are good at supplying those, but they’ve been pretty good at waiting.”
Hopes for northern easing
Consumers on Queensland’s Darling and Western Downs have been paying around $5/t above the market to cover themselves in the near term as cattle on feed numbers show no sign of dropping, despite feeder cattle being in tight supply.
“Barley growers have held their nerve and they’re not selling all their barley,” one trader said.
Consumers remain hopeful trade and grower selling will drop the domestic price as we head towards autumn.
“Once that Russian export tax is lifted at the end of June, the market will fall away, and growers know they need to sell what’s surplus to their own needs before then.”
Sorghum planting advances
Queensland and northern NSW have planted plenty of sorghum, and most growing areas have had 30-100 millimetres of rain in the past month.
The rain has been ideal for crops in the ground, and has sparked a flurry of late planting.
Trade sources say growers are reluctant to oversell in case the season goes against the forecast for coming months, turning hot and dry ahead of the harvest which will start next month.
While China is the likely destination for much of Australia’s new-crop sorghum exports, domestic consumers are expected to shift some demand into the red grain if barley gets much dearer.
“Feed wheat is starting to firm up, and barley is going with it,” one source said.
“Barley is getting harder to find, and what hasn’t been sold by now the grower might be ready to hang on to for their own use if things turn dry.”
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