Feedgrain Focus: Wheat soft, barley firm as exports dominate

Liz Wells, January 28, 2021

Full bunkers at GrainCorp’s Speed site in the Victorian Mallee are signs of a bountiful winter-crop harvest. Photo: Reuben Banfield

BUOYANT demand for bulk barley and containerised sorghum has domestic buyers of both grains sitting out of the market until prices soften, while wheat is trading sideways with limited liquidity.

Feedlots in Queensland and northern New South Wales have ratcheted back their demand for now in the face of the strong feeder cattle market, and southern feedmills are buying limited tonnage of white grains on dips in the market.

On the production side, patchy light rain has fallen in most sorghum-growing areas in the past week, with Mungindi on 63 millimetres and Pallamallawa with 46mm getting the highest registrations.

While some sorghum crops are in need of a drink, prospects are consolidating for a crop which will hit the market from early March.

This week Last week Change
Barley Downs Feb $280 $277 Up
Barley Melbourne Feb $265 $255 Up
Wheat Downs Feb $315 $318 Down
Wheat Melbourne Feb $315 $315 Steady
Sorghum Downs Mar-Apr $325 $320 Up

Table 1: Indicative prices in AUD per tonne.

Sales slow in south

Growers in Victoria and southern NSW have slowed their selling of grain to a minimum as they plan their planting program for 2021.

One trader said domestic consumers would wait for grower interest in selling grain to pick up on the back of demand for fertiliser for this year’s crops.

“The liquidity in domestic markets is extremely thin right now; the domestic buyer is the unloved child right now.

“Merchants are more interested in selling big lots of grain to people accumulating for export rather than worrying about a truckload here and there to a country mill.”

This is not troubling the domestic consumer, which is largely seen as covered for the current quarter.

“Between now and early April, the farmers are going to want to come and get their fertiliser as the backload, so that will see them bring some grain to market.”

Success for Australian-based exporters in Saudi’s latest barley tender has been supportive of prices, but is not expected to force a rally.

This is because nine of the 11 60,000t cargoes booked are to be supplied by entities with their own export terminals and bulk-handling assets, and have grain on hand to fill the Saudi orders.

Getting grain to ports by road and rail has therefore become the major focus of traders and bulk handlers.

Sorghum in focus

At Narrabri, Priag principal Kevin Schwager said growers were being astute about releasing grain to the market.

“A lot of farmers have huge on-farm storages, and they’re managing the sale of what’s in them professionally.”

Mr Schwager said their strategy had supported barley values, which had crept up by about $20/t since harvest.

“On sorghum, China’s leading the charge to buy in the container market, and it’s running at a premium to the domestic market.”

The container market is facing headwinds brought on by domestic and offshore logistics issues, but trade sources have said the Australia-North Asia routes are the least affected.

“It’s that demand that’s propping up the market.”

Containers ex Brisbane and Sydney carrying both sorghum and mungbeans to China are building up some critical mass ahead of their shipment programs started in March.



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