Feedgrain Focus: Traded volume lifts in south

Liz Wells, May 9, 2024

Sowing Scepter wheat at Grenfell, NSW, this week. Photo: Broden Holland

ALONGSIDE rapid progress in the sowing of eastern Australia’s winter crop, volume traded has picked up in the southern market, mostly from trading companies selling warehoused stock.

In the north, trade has been thin as mostly ideal conditions for planting of the winter crop offset the impact of rain on the summer-crop harvest.

Overall, prices have moved little, if at all, in the past week, although the southern market has seen some spikes created mostly by a shortage of farmer deliveries now that planting is in full swing.

Today May 2
Barley Downs $410 $410
ASW wheat Downs $410 $408
Sorghum Downs $348 $352
Barley Melbourne $355 $355
ASW wheat Melbourne $370 $370

Table 1: Indicative prices in Australian dollars per tonne.

Northern trade thins

Traded volume in the north has been low this week, with the triennial Beef event in Rockhampton preoccupying much of the feedlot sector.

In north-west New South Wales, AgVantage Commodities Narrabri-based broker Brendon Warnock said planting of winter crops was in full swing.

“Most places have had pretty good rain and…people are making good progress on wheat, barley and canola,” Mr Warnock said.

“Chickpeas are about a week away.”

Anticipation about potential for Australia’s biggest chickpea plant in years has been sparked by the Indian Government’s announcement that Australia has a tariff-free window until March 2025.

Some pockets of the northern region are too wet to keep planting winter crops and/or harvesting summer ones.

However, most are set up for a strong and early start for their canola, cereal, chickpea and faba bean crops.

In the week to 9am today, some growers in central and northern New South Wales have had more rain, with registrations including: Coonamble 25mm; Condobolin 46mm; Forbes 31mm; Gunnedah 9mm; Mungindi 26mm, and Walgett 32mm.

Mr Warnock said grain being out-turned from farms in north-western NSW is mostly heading north.

“The Downs is the draw from our area.”

In contrast, warehoused and on-farm grain in the Liverpool Plains is mostly being consumed locally, or heading to Newcastle for export.

Mr Warnock said the northern NSW sorghum harvest was winding down, with most growers selling for cash on all grades.

“The piggery sector has been mopping up lower grades, and some headers have been knocking out that rain-affected grain.”

He said the result on those crops has been a yield penalty, but quality was not as low as initially feared after widespread rain last month, but delivering to moisture specs has been a challenge as days get cooler and shorter.

In southern Qld, some Western Downs farmers are only halfway through their sorghum harvest, as cool and showery weather slows progress after last month’s rain.

However, some growers have finished harvesting sorghum, or are around two-thirds through, and traders appear to be covered for May requirements for bulk and containerised exports.

“A lot of blokes are saying they’re covered for May, and they’re looking for June now,” one trader said.

Domestic demand for wheat and barley is thin in the near term, with a good body of feed heading into winter providing graziers with the option of putting cattle into feedlots at heavier weights.

The trader said feedmills were buying a load or two of wheat and/or barley to “push their averages down” after buying grain earlier in the year at $40-$60/t above current rates..

“If you have a bit of tonnage, they’ll take it.”

Woodside Commodities managing director Hamish Steele-Park said cottonseed trading has been range-bound over the past week, despite firmer US cottonseed values.

“Gins are starting operation, but wet weather is delaying picking in parts, and there’s a lack of modules in some gin yards,” Mr Steele-Park said.

In the local cottonseed market, traded volume remains low, and is quoted at around $460/t ex Moree, and $455/t gin spread ex Namoi Valley.

In the south, Riverina gin spread is trading at $455-$460/t.

Spikes in south

Parts of Victoria and southern NSW, and much of South Australia, are in need of rain to top up soil moisture as winter-crop planting continues at pace.

With growers glued to their tractor seats and not in a position to be running grain to consumers or ports, sources report traders have been providing the volume coming out of warehousing.

“With people sowing, there are less trucks on the road, and there are some shorts around,” one trader said.

In Vic’s Goulburn Valley, wheat and barley prices are up around $40/t on where they were prior to Easter.

The trader said growers’ plans for late-plant or post-plant fertiliser collection could see ports rather than up-country mills being a preferred delivery point for growers looking to backload with urea.

While a few growers have finished planting their winter crop, most are 50-75pc through, and others have stopped as they wait for 10-15mm to wet the topsoil.

“Some people pulled up 10 days ago; they’re waiting for rain.”

Dry conditions in parts of south-eastern Australia have some mixed farmers supplementary feeding their livestock, mostly with lupins or barley, and faba bean prices have spiked on ongoing export demand.

“I can’t buy them against the export markets; at $550-$600/t delivered port, I just can’t match that.”

GeoCommodities broker Brad Knight said limited selling from growers mid sowing has created some shorts in the market, a situation likely to abate in the next week or two.

“Once the individual farmer is 60-70pc done, they relax a bit,” Mr Knight said.

“At the start, when they’ve got four or five commodities to sow, they’re not interested in talking about selling.”

“What we’re seeing traction on is warehoused grain; it’s mostly wheat that’s connected.”

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