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Feedgrain Focus: Nearby jumps as rain tightens supply

Liz Wells, October 29, 2020

Storms have interrupted harvest across southern Queensland and northern NSW in the past week. Photo: Lance Wise, Bowenville

COMPETITION for a limited amount of available grain has heightened this week amid widespread storms and showers in southern Queensland and northern New South Wales.

The rain has stopped or slowed harvest on many farms, and made trucking from most properties without all-weather access impossible.

This has revived the inverse ahead of volume new crop, which is expected to arrive in mid-November, provided there are no further widespread rain delays.

“It’s all about who wins and who loses in storm lotto,” one trader said.

Domestic flour millers are this week bidding against export accumulators for new-crop wheat, while on barley, short covering from domestic consumers has inflated values.

This week Last week Change
Barley Downs Oct-Nov $265 $260 Up
Barley Downs Jan $265 $263 Up
Barley Melbourne early Nov $265 $260 Up
Barley Melbourne Jan $255 $252 Up
Wheat Downs Nov $340 $315 Up
Wheat Downs Jan $320 $312 Up
Wheat Melbourne early Nov $355 $345 Up
Wheat Melbourne Jan $327 $333 Down
Sorghum Downs Oct $355 $335 Up
Sorghum Downs Mar-Apr $320 $295 Up

Table 1: Indicative delivered grain prices in AUD per tonne.

Stocks exhausted

Trade sources report old-crop stocks of wheat and barley have been virtually exhausted, and flour millers who are looking for lower-protein wheat appear to be suffering the most this week from the rain-delayed harvest.

They are said to be bidding aggressively for tonnage to blend with Queensland wheat harvested pre-rain which had protein of 14-15 per cent, too high for bakers’ flour.

Millers could normally expect a considerable volume of new-crop ASW and APW-type wheat to be available now as the harvest rolls south and into slopes areas, but rain has kept it in the paddock for now.

With at least one export cargo of wheat expected to load in Brisbane next month, plus two out of Newcastle, plus container business, new-crop wheat has become incredibly tight.

“This rain will wash a bit of protein off the northern market, and the feed consumer has to compete with flour miller on what’s around,” one trader said.

Early barley at an attractive discount to wheat has flowed into feedlots on the Darling and Western Downs in recent weeks, and barley supplies have temporarily tightened up in eastern states and in South Australia.

“Everyone thought there’d be a carryout of barley and there isn’t.”

Robinson Grain Toowoomba-based trader Anthony Furse said wheat graded SFW was yet to hit the market, and may not come to pass if rain stops and some good drying weather sets in.

“There’s enough happening west of where the storms have been that you’re still getting a supply of wheat and barley,” Mr Furse said.

“You’re just not having the whole volume coming at the market at once.”

“The growers wanted to get their high-quality grain off and into their own silos or the bulk-handler’s depot, and then it got quiet with the rain.”

Weather permitting, farms around the Queensland-NSW border are going flat out with their barley and wheat harvests.

Rainfall registrations in the week to 9am today in southern Queensland include: Dalby 19mm; Nindigully 9mm; Oakey 64mm, and Roma 26mm.

Totals have been hugely variable between districts and even paddocks, with one grower east of Dalby reporting falls of 14-40mm in the property’s rain gauges.

“Some farms are okay to get grain out of, and some people are dragging truck trailers around with tractors to get the grain.”

In NSW, falls have been equally patchy and, like Queensland, some farms and districts have recorded not a drop.

Weekly registrations in NSW include: Coonamble 39mm; Forbes 90mm; Gunnedah 56mm; Lake Cargelligo 51mm; Moree 29mm; Narrabri 67mm; Quirindi 121mm, and Walgett 45mm.

Feedlots pull back

Trade sources have said feedlots which are not vertically integrated are getting feeder cattle at heavier weights coming in as the result of improved pasture conditions, and numbers on feed past January appear likely to slide in the current trading environment.

Feedlots are therefore seen as mostly comfortable with their level of coverage as they wait for some weather-damaged grain to be offered.

“We’re not seeing a lot of feedlot demand for January forward.”

In the Maranoa and Western Downs, most farms are somewhere between 50 and 100-per-cent complete on their cereal harvest, and are yet to start on chickpeas.

Rain ideal for sorghum

Most growers harvesting now are also sorghum growers, and have already planted most or all of their crop.

Earliest paddocks were planted in August, and sorghum crops in southern Queensland and northern NSW are powering ahead thanks to recent rain.

The market for sorghum delivered March-April has rallied, despite some growers advancing their new-crop sales on improved yield prospects.

The price rally is based on prevailing demand from China, which is in the market for current-crop containerised sorghum from Australia, and is expected to be in the market for new-crop bulk as well.

Southern prospects swell

All but the earliest crops in Victoria and on the slopes of southern NSW are benefitting from rain in the past week, with most cropping districts in Victoria getting a modest 5-15mm for the week.

The rain has helped to maximise yield potential for south-eastern Australia’s wheat and barley crops.

“We’re waiting for a bit of harvest activity, and we’ve seen current barley market creep with a bit of weather around and no harvest,” Riordan Grain Services general manager Mark Lewis said.

Early crops in Victoria’s north-west are being harvested, and deliveries to bulk handlers are expected to start next week, weather permitting.

“Even in southern NSW, people are wanting to get started, but the moisture in the grain is a bit too high if they want to sell straight off the header,” one trader said.

New-crop barley from Victoria, and possibly NSW, is not likely to be exported before January, with canola and wheat expected to take precedence on the shipping stems.

 

 

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