Feedgrain Focus: Rain flattens market in limited volume ahead of new-crop

Henry and Liz Wells, October 11, 2018

RECENT scattered falls of rain have given rise to hopes for an end to drought-feeding of livestock, but this month has seen little consumer activity in the feedgrain market in northern New South Wales and southern Queensland.

Meantime, in the south rain over much of NSW has fallen too late to bolster yields in canola and cereal crops in central and northern NSW, but has sparked pasture growth.

“Grain values might have dropped a little bit in the past few days, but hay has been the main focus,” Delta Ag Harden-based broker, Brad McKinnon, said.

“There’s a lot of baling of crops occurring, because of frosting or moisture stress or both,” Mr McKinnon said.

ASW wheat for prompt delivery to the southwest slopes of NSW has been trading at around $470-$480/t, and $10/t more for barley, while lupins are trading at $600/t ex farm.

“With this recent rain, the market won’t move up, but it’s hard to predict what’s going to happen with new-crop because people aren’t going to be putting it through the bulk-handling system.”

“There’s just not much of it around.”

The opening of NSW bulk-handling sites anywhere north of West Wyalong will come as a surprise to most in the market.

Steady in the south

Farm Tender online broker, Dwain Duxson, said wheat and barley values were steady in the south.

“That bit of rain has helped to fill crops in western Victoria, and in southeast South Australia.

“Still, a lot of cereals and canola has been cut for hay anywhere north of the highway between Melbourne and Adelaide, and that feed situation is pretty tight all the way through.”

Darling Downs inverse

Wheat free-on-truck Brisbane spot had been trading at $455/t, while October delivered Darling Downs wheat has traded at $475/t.

The inverse between the current month and early 2019 wheat has remained strong; January forwards wheat delivered Darling Downs this week had traded to a recent low of $437/t plus carry.

The barley price spread differential to wheat was nominally about $10/t both in nearby and early 2019 deliveries to southeast Queensland as the meagre local barley harvest continued.

New-season sorghum, quoted today at around $370/t delivered Downs March/April 2019, was attracting enquiry from growers, though none were prepared to make forward sales.

Current-crop sorghum in southern Queensland was quoted at a premium of $50-60/t over new-crop.

Cottonseed value dampened

Woodside Commodities director, Hamish Steele-Park, said recent rain, and forecasts for more rain this week, has dampened values by about $10/t for current-crop and new-crop cottonseed.

“Current crop cottonseed is quoted about $645/t delivered Darling Downs October.  The ex Gwydir Valley gin site price was about $610/t October and ex MIA cottonseed was quoted in the range $545-550/t delivered October and November 2018.”

Little activity has been reported in new-crop cottonseed this week.

Gwydir/Namoi Valley gin seed was offered $425/t gin spread, and ex Macquarie Valley and MIA gin spread 2019 has been offered at $390/t and $385/t respectively.

Mr Steele-Park said there was no export demand at these levels, as the price was too high compared with cottonseed from other origins.

Cargill’s announcement that it would cease operations at its Narrabri crush plant, unprofitable for a number of years, had also impacted the sentiment of the cottonseed market.

Mr Steele-Park said the 2019 offer price of cottonseed appeared fair value when compared with wheat and coarse grains in the beef feedlot ration, though consumers this week were preferring to hold off buying new season cottonseed.





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