VALUES for feed wheat have fallen in the past week with wet weather, and more on the forecast, widening SFW’s discount to higher grades.
The likelihood of low-protein wheat being over-represented in the New South Wales crop is growing with every rain event, and consumers are largely sitting out of the market in the hope that the spread widens further.
Accumulation for sorghum exports continues at full tilt, but prompt buying for barley and wheat shipments has slowed as buyers eye cheaper new-crop values and Newcastle battles ongoing logistics issues.
On a positive note, the Australian Rail Track Corporation (ARTC) has today announced it will reopen the Moss Vale-Unanderra line on October 4.
|SFW wheat Downs
Table 1: Indicative prices in Australian dollars per tonne.
Damp in north
In the week to 9am today, patchy rain fell across the Queensland grainbelt.
Registrations included: Dalby 38mm; Emerald 24mm; Jondaryan 30mm; Hannaford 28mm; Kingaroy 43mm; Macalister 47mm; Miles 54mm; Oakey 29mm, and Springsure 15mm.
In NSW, amounts were also patchy, and included: Condobolin 10mm; Peak Hill 4mm; Moree 42mm; Narrabri 31mmm, Walgett 6mm and West Wyalong 7mm.
The rain, and wet conditions on many farms, has prevented outturn of grain from some sites.
However, the northern market’s logistics issues have been centred on Newcastle, where a fire at GrainCorp’s Carrington complex halted operations over the weekend, and big seas prevented vessel movements.
A rain-bearing front is travelling east across southern Queensland and northern NSW today, and is forecast to drop 15-40mm of rain most growers could do without.
“A few growers are getting a bit nervous with constant rain coming through,” one trader said.
It is making low-protein wheat from the wetter areas look likely, and hopes high for a dry-down to allow sorghum planting.
“It’s raining this week, and it’s supposed to rain next week and the week after.
“The window’s starting to open now for sorghum.
“On the Downs, you need to plant it is September-October.”
“That will be difficult if it keeps raining.”
SOR1 sorghum is hard to find, and downgraded sorghum is selling in the domestic and export markets.
While the occasional truckload of SFW wheat and barley is trading, consumers in the feedlot sector are mostly seen as fully covered up to November, and poultry and feedmills are close behind.
“There’s still pockets of SFW out there on farm, but there aren’t many bids.
“Consumers are buying a little bit as back-up, and milling-grade wheats have been a little bit stronger, which reflects the whole wet-weather thing.”
“On barley, some buyers are chasing BAR2 or 3.”
At Inverell, Stewarts Grains trader Robert Quinn said plenty of grain is still heading by road to the Port of Brisbane for export.
“There’s plenty of grain still around, and trucks are flat out.”
As evidenced by ABARES lift in its estimates released this week in its latest Australian Crop Report, the national wheat and barley crops are only getting bigger.
“I think most end users are comfortable with crop prospects; crops are going to be big.”
The unknown is quality, with concerns about considerable tonnage of shot and sprung grain being harvested if spring remains wet to its end.
The saviour could well be the considerable domestic market for downgraded grain, which put a floor in the price for cereals from the wet harvest of last year and stopped feed wheat’s discount to ASW widening to levels expected.
“Even with substantial amounts of feed wheat, it didn’t blow out to $100/t like some people thought it would; it was more like $50-$60/t.”
“The market can absorb a lot of it.”
Export demand for SFW contributed significantly to SFW values holding up, and whether that can be repeated depends on factors including Chinese demand and Ukraine’s ability to export grain.
Mr Stewart said uncertainty about the season had limited grower interest in forward selling.
“Growers are very quiet and very slow in forward sales.”
Weather permitting, the wider Moree district is expected to start harvesting barley in around mid-October.
Vital Kembla line to reopen
ARTC plans to reopen the Moss Vale-Unanderra line were announced today.
In a statement, ARTC said the line has been closed since March 9 while ARTC and its contractor partners conducted restoration work on the line after it was severely impacted by heavy rain.
The rain caused multiple land slips and significant movement of some embankments on complex parts of the line with steep terrain.
ARTC and contractor works was slowed by further heavy rain in July that set us back.
During the closure of the line ARTC has worked with customers and Sydney Trains to develop a freight schedule for the South Coast line, to carry additional diverted freight services.
ARTC has also liaised closely with stakeholders including grain companies and train operators to assess the impacts and appropriate mitigations.
“We would like to thank our customers for their patience during the network shutdown, we appreciate the challenges the shutdown caused them, but we know that they understand that safety is our number one priority on our network,” ARTC group executive interstate network Allan Jones said.
South set for spring
Victoria has had more general rain of 2-25mm in most locations, and any registrations in South Australia have mostly been less than 10mm.
Western Australia had general rain of 15-40mm, and is now set up ideally for spring.
In Victoria, Kelly Grains trader Jeremy Swincer said global uncertainty based on the Black Sea situation, and current bids being insufficient to entice grower selling, have made for a quiet week.
“There’s not a lot of liquidity from the growers at the moment,” Mr Swincer said.
While barley prices have changed little in the past week, SFW wheat values have lost up to $20/t.
“Barley prices are reasonably steady, $5/t down from 2-3 weeks ago, but SFW wheat’s felt more of an impact, and ASW and higher-protein grades are holding.
“That could the expectation of a wet harvest.”
It also points to growers wanting to make room for the upcoming crop.
“Growers want to sell old-crop, and that’s all they’ve got.”
The offering has been meeting limited demand from export and domestic customers, with end-users hopeful of a widening spread.
“Consumers don’t want to step in front of SFW at the moment.”
There is a little more interest in prompt ASW wheat buyers, but sellers feel it is worth retaining for a few more months.
“ASW sellers won’t sell sub $400 because you can sell it in new-crop slots for more.”
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