DISCOUNTED sorghum is wriggling into some feed rations as the northern wheat and barley markets continue to firm, while in the south, barley values have risen despite rain in the past week helping to consolidate new-crop prospects.
However, the Mallee on both sides of the South Australian-Victorian border keeps missing general soaking rain, and remains the new-crop wildcard.
|$308 up $3
|$290 up $2 Jan
|$333 up $3
|$317 steady Jan
|$317 up $2
|$275 Mar-Apr steady
|$288 up $10
|$285 up $7 Jan
|$334 up $1
|$333 up $6 Jan
Table 1: Indicative delivered prices in Australian dollars per tonne.
Sorghum holds appeal
Rain throughout the sorghum harvest in southern Queensland and northern New South Wales has caused sprouting, and Sorghum X is being accumulated by traders to cater for parcels where sprouting exceeds 10 per cent.
While consumer interest in Sorghum X is limited at present, traders are buying it from growers at around $240 per tonne, while Sorghum 2 with a maximum 10pc sprouting is pricing into poultry and some beef feedlot rations.
It is trading at a discount of around $30/t to Sorghum 1, which has a maximum sprouting tolerance of 3pc.
“Sorghum X has been accumulated over the past four to six weeks, but there aren’t a lot of buyers there for it,” a trade source said.
Traders in the north have reported an increase in selling interest from growers on current-crop wheat and barley now they have finished their drawn-out summer-crop harvest, and are done, or close to it, on winter-crop planting.
“In the past few days, we’ve seen a few thousand tonnes of wheat and barley coming forward from growers.”
Plenty of sorghum is being dried on farm to get moisture content down to acceptable levels, and this is limiting supply-side pressure on the nearby market.
One trader said some growers were washing out on good-quality sorghum and selling to neighbours who were short on their contracts, and this was supporting the export-focused market for Sorghum 1.
He said lower off-spec sorghum had no export home.
“It’s the feedlots and poultry guys that are buying that sorghum.”
While chickpeas and durum are still to be sown in many parts of the northern region, the coming weeks look less frantic than the previous ones.
“There have been a lot farmers in April, May and June that haven’t been sellers because they’re busy sowing, and that will be changing soon,” Tamworth-based Norco commodity trader Simon McDougall said.
“Coming out of January-June, consumers are looking at their spreadsheets for what they need for the back end of the year, and a lot are surprised by the rally we’re seeing in feed barley,” he said.
As big parcels of barley north of southern NSW get harder to find, its value in up-country markets is closing its spread to wheat.
On the Liverpool Plains, barley’s discount to wheat is around $40/t, but narrows to more like $15/t on the Downs of southern Queensland, where local barley has been scarce for some time.
“That $40 spread is wide enough to keep barley in feed rations.”
Grades of wheat including H2 are being used to blend with off-spec sorghum in some rations as a cheaper alternative to barley.
“There is some off-spec sorghum in silos across NSW and Queensland growing areas, and some sorghum still to be harvested which will likely be SOR2 or SORX.
“As wheat and barley prices rise, sectors are going to be looking at alternatives.”
On the demand side, Mr McDougall said consumers were buying out as far as August, and recent rain had made accessing grain stored on farm difficult this week.
“It’s wet on farm, and that’s making logistics a bit of a challenge.”
Australia is still exporting milling and feed wheat in big volumes, and wheat is dominating the shipping stems in the back months of the current year.
Robinson Grain wheat trader Jock Benham said plenty of grain was still making its way to export.
“Wheat demand hasn’t dropped off into July, and Australian wheat still looks competitive for July and August.”
Southern values steady
Most of South Australia’s grain-growing areas had a welcome 5-25 millimetres rain in the week to 9am today, with the Mallee once again getting the lower registrations.
In Victoria, some Wimmera locations including Horsham and Nhill got more than 30 millimetres, while others like Rupanyup got only 4mm, and the Mallee once again got mostly single-digit falls.
Ongoing dryness in the Mallee is being offset by a comfortable position for the crop in NSW, and in central and south-west Victoria.
“The Mallee missed out again, and that could have a big impact on Victorian production,” one trader said.
“It can change the market from an export to a domestic play.”
Traders across eastern Australia report trucks are still hard to book as the export task dominates activity for the foreseeable future, and this has boosted prices for nearby and new-crop slots.
“We’re not seeing too much forward selling from growers on new crop.
“There’s a little bit of a clean-out going on after they get off the tractor now that sowing’s finished, and the new financial year might see some grain come out if we get more showers to help this crop along.”
Dry weather in the US cornbelt has been supporting the global feedgrain complex, but with rain on the forecast for the coming week, Australian barley prices could well soften in line with export parity.
Current-crop cottonseed values have remained steady, according to Woodside Commodities manager Hamish Steele-Park.
“Picking and ginning remain slow due to the weather but are progressing,” Mr Steele-Park said.
“Export demand has waned a little over the past two weeks and overall demand for cottonseed remains consistent, but thin.”
Current-crop DCT was quoted this week $445/t.
Nearby values ex Gwydir Valley sites were indicated at $345/t, Namoi Valley $335/t, Macquarie $340/t and ex the Riverina region $365/t.
New-crop prospects are bright.
“Dam levels are rising and water allocations keep improving for next season.
“There’s a price inverse on the back of the bigger crop and inverted oilseed futures markets.”
Gin-spread 2022 price guide was indicated around $300/t ex.
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