Feedgrain Focus: Tight logistics, grower absence lift bids

Liz Wells, April 29, 2021

Planting of the winter crop is well under way in NSW, and growers are prioritising this over delivering grain from last year they have stored on farm. Photo: Machallie McCormack, igrain

PRICES for wheat, barley and sorghum have rallied in eastern Australia this week as traders and consumers battle to get growers to sell, and road freight remains tight.

While north-west Victoria and parts of South Australia are still waiting for planting rain, most growers in New South Wales and Queensland are flat out getting their winter crops into the ground.

In Queensland and northern NSW, many are also harvesting summer crops, and are therefore unable to take grain to port or metropolitan consumers in their own trucks.

This is putting pressure on transport operators and creating a spike in the road-freight market.

As one commentator said this week, spot loads are “nosebleed expensive”.

This week Change
Barley Downs May $282 Up $4
Barley Melbourne May $270 Up $12
Barley Melbourne January $250 Steady
Sorghum Downs May $305 $300
Wheat Downs April-May $315 Up $10
Wheat Melbourne May $335 Up $22
Wheat Melbourne January $310 Steady

Up-country pinch in south

Grain exports out of NSW and Victoria are continuing at a cracking pace, and major transport operators are busy taking grain from farms and bulk storages to port.

Trains are also playing their part, but the absence of grower deliveries is being felt now that most have picked up all the cropping inputs they need to plant their winter crop.

The upshot is that prompt bids have risen $5-$10 per tonne for wheat and barley, with tight road-freight driving the rise.

“Trucks are an issue up and down the east coast,” GeoCommodities broker Brad Knight said.

“It’s definitely sparked increased buying interest from exporters who needed to buy grain, and domestics who have been buying hand to mouth, as well as speculative buyers based on our basis being very low.”

Mr Knight said the rally of the past two weeks has attracted some grower selling, and the bottleneck for grain transport is now being felt up-country.

While earlier months had the supply chain working hard to avoid chokes going into ports and container packers, a shortage of trucks available to do farm pick-ups is putting short-term pressure on the supply chain.

“Farmers are sowing, and that’s taken their trucks off the road.”

Growers in southern NSW and parts of Victoria are looking for additional rain to keep planting.

“If we don’t get rain in the next two weeks, and we see nothing on the forecast, anxiety levels will be increasing.”

The trade is doing a small amount of new-crop selling, but growers are by and large yet to be seen.

“Grower selling is largely non existent.”

Godde’s Grain and Fertiliser trader Peter Gerhardy said spot freight rates for longer road hauls from southern NSW are up by 25-50 per cent on limited truck availability.

“Logistics is playing a huge role at the moment,” Mr Gerhardy said.

“With the pretty heavy export program at all the terminals, road freight is in high demand.

“It really had to come into play on the back of a huge crop, and the Victorian and southern NSW market has rallied considerably in the past 10 days by probably $10-$17/t.

“The market for July-August isn’t reflecting that.”

Mr Gerhardy estimated around 60 per cent of the Riverina crop was planted, with canola and longer-season wheats mostly up and away.

“We’re starting to run out of moisture now, but there’s the chance of 5-10 millimetres of rain next week, and that’s really all we’d need to get going again.”

North struggles

If trucks are difficult to get from central NSW south, trade sources report they are nigh on impossible to book in the north.

However, this is expected to improve in the coming week as the market focus shifts away from delivering sorghum to Brisbane for bulk export.

Goldstar Commodities director Geoff Webb said the wheat and barley market was volatile but up overall, and logistics into this week are difficult.

“The market is varying depending on the buyer, the destination, and the day.

“You can’t get trucks; freight’s difficult.

“Logistics are dictating where the market is, and growers are off doing other things.”

That includes carting cotton, which is now being picked and delivered to gins in southern Queensland and northern NSW.

Top-grade sorghum remains in high demand, and is trading at up to $370/t delivered Brisbane, around $65/t above the Downs market.

This much-inflated premium between origin and port reflects high freight rates and covering of the last of the short positions to fill bulk export demand.

On the Downs, second-grade sorghum is trading at around $250/t delivered, and has some tolerance for sprouting caused by recent rain.



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