
The first load of new-crop sorghum arrives at Broadbent’s Jondaryan depot on the Darling Downs this week. Photo: CHS Broadbent
VOLUME traded in the feedgrain market has been thin, despite bids creeping up to draw out tonnage and cover a limited number of short positions.
In the north, sorghum currently appears on Queensland stems no earlier than May, but traders feel April, and possibly last-half March, shipments may be possible now that harvest of the red grain is off to a strong and early start.
In the south, growers have relied on canola, lentils, milling wheat, and malting barley to generate the cash they need post harvest.
It means volume traded in ASW-type wheat and feed barley is thin, although the relative affordability of feed barley in the global market may inspire some near-term accumulation for export.
Today | Jan 16 | |
Barley Downs | $315 | $312 |
ASW Downs | $335 | $335 |
Sorghum Downs | $325 | $324 |
Barley Melbourne | $338 | $335 |
ASW Melbourne | $362 | $355 |
Table 1: Indicative delivered prices in Australian dollars per tonne.
North turns to sorghum
Robinson Grain Toowoomba-based trader Anthony Furse said northern growers have sold the wheat and barley required to make space for sorghum.
“There’s not a lot of wheat and barley trade; considering the size of the crop, it’s pretty subdued,” he said.
Chickpeas remain the major cash crop being sold, although demand from exporters is expected to wain once the final cargoes to depart in time to catch India’s tariff-free period are filled.
The sorghum harvest in southern Qld and northern New South Wales is off to a strong and early start, and Mr Furse said growers were now starting to advance their forward sales from 5-10 percent pre-harvest.
Growers appear happy to sit on ASW-type wheat and feed barley until bids get to a level they like.
“It comes down to: ‘Can I get $300 on farm?’,” he said of the grower’s price target.
Sorghum is only around $10/t cheaper than wheat, making it $20/t or more too expensive to price into anything other than specialised poultry rations, and looking very much like it will head to China in bulk.
Consumers are said to be well covered in the north on wheat and barley as far out as March, and with the focus of Brisbane shipping stems set to roll straight from pulses into sorghum, they are not expecting heady competition from export accumulators.
“They know there’s supply out there,” Mr Furse said of the domestic consumer.
Another trader made the observation that northern growers are getting better at turning over grain stored in on-farm storages as a cost-effective means of avoiding warehousing.
This has seen an unusually busy accumulation period for the domestic consumer over the wider Christmas-New Year period as growers get ready to store sorghum on-farm in case they decide not to sell straight off the header.
“On barley, all the February homes are choked, and March is about the same,” the trader said, echoing Mr Furse’s comment about $300/t on-farm being the target price for growers to sell barley and feed wheat.
The trader added that SFW-type wheat was “getting harder to buy”.
SFW has been trading at $10/t under ASW, but mostly poultry consumers are looking for loads with a minimum testweight of 76kg per hectolitre, 6kg above Grain Trade Australia specifications.
Throughout the winter-crop harvest and beyond, traders have observed that off-spec grain was showing the least attractive prices to growers, and they may therefore hold it for some months.
On cottonseed, production from the crop to be picked primarily from March onward is looking good.
While dryland plantings could do with some rain, Woodside Commodities managing director Hamish Steele-Park said the crop is likely to be bigger than last year’s.
The Gwydir Valley cottonseed market is sitting at aorund $385/t ex gin for January-February, and $370-$375/t for new crop.
In the southern market, cottonseed is considerably dearer, with Riverina ex gin current crop at $430/t, and new crop at $400/t.
“Export demand is lingering a little below current values for new crop,” Mr Steele-Park said.
“However, there’s no export demand for current crop, as US seed is cheaper for nearby positions into Asia.”
South well sold
Like their northern peers, growers in Victoria and southern NSW appear to be in no hurry to sell wheat and barley stored on farm, despite the firming market.
“It’s pretty stable at the minute,” Peters Commodities trader Peter Gerhardy said.
The exception is shorts, which indicate some consumers, and possibly exporters, have orders to complete.
“We’ll see a $5 spike in the market, and then all of a sudden it’s gone again,” Mr Gerhardy said.
In southern NSW, a low-rainfall growing season has produced a larger-than-normal proportion of high-protein wheat, and surprisingly little downgraded grain, although rain at harvest created pockets of shot-and-sprung grain.
“Growers have cashed in their canola, and a lot of protein wheat – there was a lot around.
“People were stripping Prime Hard wheat, and they’ve never stripped Prime Hard before in their life.”
While frost in September clipped yield potential from many wheat and barley crops, Mr Gerhardy said it did not impact quality, as affected heads aborted rather than shrivelling.
“It was an extraordinary year as far as quality was concerned.. and people with ASW and SFW are..in no hurry to sell.
“They’re all pretty cash-flow positive.”
Aiding that was the limited in-crop rain, which meant growers spent less than normal on urea to top-dress the crop.
Modest yields have also enabled growers to store a larger-than-normal proportion of their cereals on farm in their expanding silo complexes.
“On-farm storage is getting bigger and bigger and bigger every year.”
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