Australia: Cereals firm as consumers return

Barley prices have firmed by around $10 per tonne in the past week as consumer interest particularly in the northern market returns for the first time in months.

Wheat has trade sideways in the north, but picked up $10/t in the south to reflect some modest buying from the trade.

Sorghum has bucked the firmer trend, with values dropping in response to the collapse of the early harvest premium.

Growers in many regions are planting early winter crops, mainly dual-purpose oats and canola, and some faba beans.

Providing good rain arrives in coming weeks to wet topsoil, widespread planting of wheat, barley, canola and pulses will kick off in the last week or two of April.

Table 1: Indicative prices in Australian dollars per tonne.

Sorghum harvesting in southern Queensland and far northern New South Wales is getting close to its peak period, and prices have eased in response to the increased supply.

This has seen the premium for early sorghum disappear, but prices remain at levels that growers are happy to meet.

Goondiwindi-based broker Gerard Doherty, Knight Commodities, said growers have been ready sellers of sorghum off the header.

“It’s going into chicken-feed market and into containers, and bulk activity has started,” Mr Doherty said.

“Because premiums have been there, and delivery is easy, limited amounts are going into depots.”

Likewise, little appears to be going into on-farm storages, despite some wheat and barley being sold recently to make room for sorghum.

Mr Doherty said sorghum crops around the NSW-Qld border have been yielding a pleasing 6-8t/ha.

“This is the early part; harvest for the bulk of crops is two to three weeks away.”

Barley in the northern market has rallied $10-$15/t in the past week as feedlots resume buying, some for the first time in months.

“We’re seeing more engagement from consumers.”

That has come mostly from feedlots who have been stocking up now that cattle prices have fallen.

“It’s been quite dry in the past six to eight weeks, and a lot of places are back to maximum capacity.”

Mr Doherty said a cheerier mood is evident across the market now that liquidity has improved after concerns about an El Nino led to consumers being overbought and producers undersold.

He said unsold wheat with good protein specs seems to be in short supply, but uncommitted ASW-type wheat and feed barley was still on hand in reasonable volume.

In the cottonseed market, prices have rallied $10-$20/t this month based on Chinese demand for containerised product.

In the southern market, a $10-$15/t rally, and more in places, in canola prices has sparked a flush of grower selling, while wheat and barley are mostly being sold within the trade.

Peters Commodities trader Peter Gerhardy said some consumer interest was being seen now that the market for wheat and barley appears to have bottomed.

“The wheat job has picked up a little bit…and consumers are starting to stick their heads up,” Mr Gerhardy said.

“They’ll start doing a bit of tyre-kicking if we continue to see some firmness in the market.”

Freight is also a factor, with some Qld and northern NSW trucks operating in Victoria and southern NSW, where volume to cart has been much greater than in the north in the lead-up to the sorghum harvest.

“A lot of northern NSW trucks are coming down south, so they might be looking for freight to go home for Easter, or for the sorghum harvest.”

Having sold pulses, some canola, and high-grade wheat and malting barley already, Mr Gerhardy said growers were generally comfortable with their cash position.

Consumers in the south are seen as mostly covered for the coming quarter, and some have booked what they need for the September quarter too.

Provided an El Niño does not develop this year, export demand is needed to absorb south-eastern Australia’s surplus ASW-type wheat and feed barley.

The June 30 end to GrainCorp’s free warehousing is expected to steer a considerable volume of wheat and barley into the export pathway in the September quarter, which could put pressure on domestic values.

Tags: wheat, sorghum, Эль-Ниньо, barley, prices