WHEAT and barley have traded sideways in the past week as growers do their darnedest to keep supply-side pressure off the market.
This is masking the effect on price of lacklustre demand from the export market which has a decidedly softer tone, partly due to competition from the Black Sea and Argentina.
The tail end of harvest is dragging on in south-west Victoria and South Australia’s South East, with all cereals expected to be off by the end of next week, weather permitting.
|ASW wheat Downs
|ASW wheat Melbourne
Table 1: Indicative prices in Australian dollars per tonne.
New-crop sorghum has started to hit the bins this week in what will be a long and stop-start harvest to reflect widely varying sowing times.
While the earliest southern Queensland and northern New South Wales crops are now being harvested, planting of the Central Queensland crop is yet to start in earnest.
Trade sources report interest from China in sorghum has backed off, and with sorghum still not showing a large enough discount to white grains to spark widespread domestic demand for those feeding pigs and chickens, the market has fallen.
Barley is the preferred grain for feedlots over summer, and traders say they have all fully covered themselves up to the changeover to wheat expected around April when the weather cools down.
“It’s hard to pull barley out of the woodwork,” one trader said.
“There’s not the volume there.”
As with the previous harvest, new-crop barley in Qld and northern NSW has had unusually low protein, and many growers who often produce feed have made malting specs.
They are holding their barley in the hope that China-driven malting demand kicks into the northern market later in the year.
Sources say an abundance of high test-weight ASW wheat throughout eastern Australia will keep it in rations over the winter months.
End to southern harvest in sight
Across much of eastern and South Australia, recent weeks have brought enough rain to fill or substantially top up subsoil-moisture profiles ahead of winter-crop planting which will start in April.
The downside is that many later crops in Vic and SA spent a week or more past their ideal harvest date in the paddock because of rain and boggy conditions, and have lost brightness and weight.
Red feed wheat varieties grown in high-rainfall zones are the most affected, and some grain which has had considerable rain on it in the head is shot and sprung.
Riordan Grain Services manager Mark Lewis said the Vic harvest should finish in the next five or so days after a number of rain delays.
“It’s been very frustrating, but it’s set things up for the next crop,” Mr Lewis said.
“Wheat is starting to lose some test weight; a lot of it is sprouted, but it’ll still have a home.”
Mr Lewis said plenty of good-quality ASW wheat from harvest was on hand in Vic, and exporters may be able to blend it with a small amount of downgraded wheat to meet standards of export customers buying feed.
Despite sporadic Houthi attacks on Red Sea shipping, and the ongoing Ukraine-Russia conflict, grain exports globally are continuing apace from origins including the Black Sea.
“That’s what everyone’s grappling with; it’s slow on the demand front.”
Downgraded wheat is nominally priced at around $10-$15/t below ASW, not enough to inspire widespread buying interest from domestic consumers.
“They’re happy to buy ASW.”
Mr Lewis said grower requirements to finance new-crop inputs ahead of what could be an early start to planting may force some sales out of warehousing and on-farm storage.
However, those sales may be of canola, said to be warehoused in an unusually large amount due to higher-than-expected yields for many, and prices below grower selling targets at harvest.
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