Australia: Barley rallies amid dry, increased buying

As hot and dry weather sets in over south-eastern Australia, barley values have risen in in response to increased buying from the consumer.

On wheat, northern values have softened to reflect the big crop now coming in, while the southern market has risen by up to $30 per tonne as production prospects slide for later cereals.

The season is delivering a huge variation in yields, with the best northern barley crops harvested so far clocking in excess of 7.5t/ha, and the lowest-yielding cereals in south-west New South Wales expected to return 1.2t/ha.

	Prompt Oct 9	Prompt Oct 16	Jan Oct 9	Jan Oct 16
Downs barley	$285	$288	$290	$302
Downs SFW	$325	$320	$330	$325
Downs sorghum	$335	$332	Mar-Apr $315	$315
Mel barley	$325	$330	$310	$330
Mel ASW	$335	$360	$330	$360

Table 1: Indicative prices in Australian dollars per tonne

Increased domestic buying has lifted the northern barley this week as potential for near-term exports pushes local consumers into the market.

Barley is yet to appear on Brisbane and Newcastle shipping stems, but is only around $10/t above export parity, meaning that figures could soon click and prompt a run of bulk accumulation.

Sunrise Commodities managing director Scott Merson said activity is currently confined to the up-country market.

“All the action is off the header,” Mr Merson said.

“Feedlots have been absent, and now they’re just starting to engage.”

Trade talk is that feedlots are using their own freshly harvested barley to cover near-term needs, and are now prepared to pay a few dollars more to keep grain out of the bulk-handling system.

In southern Qld and into northern NSW, some monster barley yields are being reported, with 8.5t/ha, and with a testweight of 75kg per hectolitre on the western Downs the highest.

However, plenty are yielding closer to half that if they missed an in-crop rain or two, particularly at the filling stage.

Chickpeas are trading at around $580/t for prompt delivery to Downs packers, low enough to make cash sales of barley, and possibly wheat, the more attractive options for growers’ cash sales ahead of the southern Qld harvest starting in earnest.

Some early faba beans have been harvested, and prices are below $300/t on farm, making them the most obvious hold for their versatility for on-farm stock, the domestic stockfeed market, or export sales.

Mostly dry weather in the north has been ideal for harvest, but sorghum planting has ground to a halt in the many areas where topsoil has dried out.

“I don’t know if we’d be 50-percent planted yet on sorghum; a lot of areas are waiting on good rain.”

Offsetting that somewhat is the impact of depressed cotton prices, which is expected to push even some irrigated area into sorghum.

Harvest is creeping south and east, with plenty in the Goondiwindi and Surat districts now going, mostly on barley.

The highest yield for a paddock reported so far has been 8t/ha in the Warra district.

Temperatures of around 35 degrees Celsius have been recorded in parts of southern NSW, Victoria and South Australia today, and more heat is expected from Sunday, with Kimba in SA expected to hit 39 degrees, and Lake Cargelligo 40 degrees on Monday.

Without the 10-15mm of rain forecast for Vic and SA crops for coming days, more will be cut for hay.

At Lake Cargelligo, Summit Ag agronomist and director Emma Ayliffe said “rain roulette” has made the difference to yields.

“We’ll average around 1.2t/ha for wheat and barley, and the good stuff maybe 2t or a touch more,” Ms Ayliffe said, adding that the poorest performers will do little more than cover seed requirements for next season.

Hay remains a more attractive option than grain for many growers based on current values for wheat and barley.

“Pretty much anyone that could cut hay has cut hay around here; it’s either on the ground, or it’s in bales.

“Some guys will sell 80-90pc of what they’ve cut, some will be half sell and half keep, and some will keep everything they’ve cut.”

Ms Ayliffe said some growers were talking about storing all their grain on farm and value-adding it themselves through livestock, or selling to local consumers.

Canola looks like being the cash crop for every grower that has it, and it is now being windrowed or direct headed in districts as far south as Lake Cargelligo.

In Victoria, growers continue to be too uncertain about yield and quality prospects to forward sell.

“This weather’s taken a fair bit of yield off the crop, and there’ll be stuff that gets harvested, and stuff that’s cut for hay,” Melaluka Trading director Mick Fitzgerald said.

Vic’s harvest is on track to start with barley in the northern Mallee in coming days, and quality is expected to be good.

“Barley might have escaped the worst of it.”

However, concerns are mounting that the hard finish to the season will create some screenings and light test-weight issues for Mallee wheat, although any rain in the next week or two would still be of benefit.

“For cash flow at harvest, it will be canola, and maybe a bit of barley.”

The late break in SA, Vic, and southern NSW has made for a late crop, and Mr Fitzgerald said a premium existed ahead of new-crop volume hitting the market.

“The November slot is dearer; stocks are very tight in Vic.”

Traders are reporting new-crop bookings, particularly barley cargoes to China, but aggressive sales out of a bumper Western Australian crop may see much of the business bypass eastern Australia’s ports.

Tags: Market, faba beans, sorghum, Australia, barley, canola, wheat, chickpeas, yields