Markets

Feedgrain Focus: Sorghum sinks in otherwise steady market

Liz Wells, January 27, 2022

A T-Ports grain bunker at the Eyre Premium Hay site in Kimba just managed to keep its feet dry in the deluge on parts of Eyre Peninsula last week. Photo: Fresh Eyre Photography

THE weight of a big crop on the cusp of harvest has put pressure on sorghum prices this week, while wheat and barley markets have been mostly steady.

Most growers are now back from their summer break, and good rain has fallen in the past week over some parts of south-eastern Australia to inspire confidence in an early and strong start to planting of the 2022-23 winter crop.

It means grower interest in selling stored or warehoused grain has picked up, and a strengthening in global values has enabled prices to hold ground.

The national Australia Day public holiday has shortened the working week, and consumers appear keen to make a modest advance on their February-March coverage.

Today Jan 20
Barley Downs $290 Steady
SFW wheat Downs $305 Steady
Sorghum Downs $295 Down $10
Barley Melbourne $315 Steady
ASW wheat Melbourne $380 Down $5
SFW wheat Melbourne $345 Steady

Table 1: Indicative delivered prices in Australian dollars per tonne.

Rain delays early sorghum harvest

Consumers in Queensland and northern New South Wales have stepped up their buying interest in barley and SFW wheat for February-March in this shortened week.

Some consumers are also showing interest in sorghum, where the early harvest has been delayed by showers, though not enough to affect quality.

Rainfall in this summer-cropping zone has been mostly light and very patchy, with higher registrations in the week to 9am today being Dalby 18mm and Jondaryan 10mm in Queensland.

In NSW, totals for the week include Moree and Wee Waa with 20mm, and Tamworth with 28mm.

At Goondiwindi, Knight Commodities broker Gerard Doherty said premiums for early sorghum delivered container packers has now evaporated, and showers have stopped the harvest and desiccation of early crops.

“There won’t be any headers turn a wheel for the next two or three days,” Mr Doherty said.

“If these headers get a go at it over the next two or three weeks, there’s a chance of significant (price) downside in the nearby.”

However, with La Niña still around, the chances of a fast sorghum harvest look highly unlikely, and Mr Doherty said the peak of off-the-header volume is likely to catch the April-July export window.

“There’s good buyer interest there, and our numbers work into export.”

Mr Doherty said wheat and barley markets were flat, with growers largely hanging on to their higher-quality wheat and booking barley and downgraded wheat into domestic consumers.

“It’s been pretty quiet.”

“Wheat and barley sellers are tidy-up jobs to make room for sorghum coming in, and most guys are holding back on wheat that’s H2 or better.

In NSW, Robinson Grain wheat trader Jock Benham said execution rather than accumulation was the focus of the trade this week.

He said growers where mostly back after their Christmas-New Year break, and those in wetter areas particularly were looking to outload grain stored in bags on farm.

Mr Benham said surprisingly high test weights, as measured in kilograms per hectolitre, and reasonable protein had given rain-affected wheat export and domestic pathways.

“The test weight has been really good right throughout, and it’s just the falling number that’s letting it down,” Mr Benham said.

While some wheat from the NSW Central West has protein below 10 per cent, traders throughout south-eastern Australia said plenty of SFW of 11pc protein and better is available.

“It had a really good test weight to start with in the 80s, and might be 76kg now.”

Selling picks up in south

In South Australia, some unseasonally high and even record rainfall has fallen in the past week, and a few spots in north-west Victoria have also had big rain.

Rainfall in the week to 9am today in Victoria: Mildura 80mm; Woomelang 23mm, and Warracknabeal Airport 49mm.

SA’s biggest registrations included Buckleboo with 202mm, Kimba 213mm, Cowell 126mm, and Kadina 114mm, and 20-50mm over much of the Adelaide Plains and points north.

This has inspired grower confidence in an early and bright start to planting, which will commence in April.

In South Australia, Flexi Grain regional manager Sam Grieve said growers were working around inundations and road closures caused by recent rain on the Eyre Peninsula (EP) and Yorke Peninsula, and export supply chains had not been impacted.

“I think a lot of growers have come back from holidays in the past couple of weeks, they’ve seen markets rally, and they’re starting to become happy sellers again,” Mr Grieve said.

He said rain at harvest did affect the quality of EP wheat, but test weights of more than 70kg/hl and protein of 11pc plus made the SFW grade saleable for export.

“On barley, we’re still seeing numbers starting with a 3, and that shows the barley supply is quite tight.”

Mr Grieve said SFW and barley were priced at similar levels.

Peters Commodities trader Peter Gerhardy said much of the Riverina’s wheat had a falling number that was below 250, with some as low as 50-100, but a test weight of above 70kg/hl.

“There wasn’t a screenings issue, and that’s why the test weights have held up well, with a lot in that 75-80kg range.”

“It’s amazed me how well the wheat has held up.

“There’s a lot of protein in it, between 11 and 13pc.”

Mr Gerhardy said exporters and feed mills supplying poultry and other customers were using SFW, and that had put a floor in the up-country as well as the delivered Melbourne market.

“We saw a $50-$60 spread between SFW and ASW at harvest, and it’s less than that now.”

One trader said Victoria’s up-country market was under more pressure than the delivered port one.

“That’s because ports are getting full, and the grain has to go somewhere if the growers want to sell it now.”

ENDS

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