Australia: Cereals flat as pulses, canola hog action

Prices for feed wheat and barley have moved little since mid-December as growers focus on pricing and delivering pulses and canola, and consumers rest on coverage previously booked for coming weeks.

In the northern region, some growers are just starting to harvest an early sorghum crop, their next cash earner after chickpeas and faba beans.

A bumper wheat and barley harvest in central and northern New South Wales, and southern Queensland, has largely been warehoused or stored on farm if bids from up-country consumers were deemed too low to send it straight to consumer.

In Victoria and southern NSW, growers are believed to have sold much of their canola, lentils, malting barley, and higher-protein wheat as cash crops

Table 1: Indicative prices per tonne.

Southern Qld has made a tentative start on a big and early sorghum harvest, with first crops coming off in the past week or two on the western Downs.

In northern NSW, where in-crop rain has been more variable, harvest is expected to start next month.

AgVantage Brendon Warnock said cereal volume traded has been generally thin since Christmas.

“A fair bit of the trade is still on holidays, and farmers are at the beach,” Mr Warnock said, adding that some consumer demand for wheat and barley has popped up for February or February-March slots.

Despite some rain at harvest, wheat and barley quality is generally good, although a reasonable volume of SFW wheat was harvested, and is finding interest in the stockfeed market at $3-$5/t below ASW.

Mr Warnock said feed wheat and barley values appear to be “grinding their way higher,” and prices are high enough to attract some grower sales.

While southern Qld has a big sorghum crop coming, and occupying the minds of growers for their next cash sale, Mr Warnock said sorghum area planted in northern NSW will not be historically large.

“Not everyone has sorghum because there was such a big winter crop.”

Up-country containers packers are generally bidding at around $300/t for new-crop sorghum, and Mr Warnock said growers closer to Newcastle or Brisbane are generally looking at sales delivered port.

Trade sources have said grower forward selling of sorghum is historically low as harvest fast approaches, based on a desire for slightly stronger prices, and concerns about rain delaying harvest and/or delivery in the prompt market.

The strong US dollar and relatively weak Australian dollar is also having an impact, and Mr Warnock said rising US corn prices are pushing some export demand the way of Australian sorghum.

“Supporting sorghum is the rising US corn price.”

The impact of the strong US dollar on sorghum is being tempered somewhat by weakness in currency in China, Australia’s biggest market by far for sorghum.

With chickpeas and faba beans capturing a chunk of the shipping year’s first-quarter slots ex Brisbane and Newcastle, Mr Warnock said the flow of wheat to market is yet to start.

“The market is telling you to let your chickpeas go.”

“If we see good planting conditions in the north, then potentially that wheat starts to flow.”

If autumn is dry, Mr Warnock said growers were likely to hold wheat and barley as a drought hedge.

In southern NSW, Key Agri broker Matt Noonan said canola has accounted for the lion’s share of post-harvest sales.

Canola bids are historically strong, and currently around $770/t for the outer slopes.

“We’re pretty well sold on canola, and grabbing the last 10 or 20 percent now,” Mr Noonan said.

“If we maintain these prices or have another kick, they’ll keep drawing it out.

Moderate cash selling of feed barley and ASW-type wheat has been seen for the current quarter, with barley currently trading at around $270-$280/t.

“Ex farm, we’ve seen a lot of the feedlots buying for January-March.”

The delivered Riverina consumer market for wheat has been relatively stable, with ASW recently trading at around $315/t plus for February-March, and showing signs of strengthening.

Mr Noonan said quality of grain harvested in southern NSW has generally been good, although rough patches in the growing season and rain at harvest downgraded some loads.

This lower-spec grain is now looking for homes, although growers are not over-zealous about selling at current values.

“If they had canola, it’s been sold at the right levels; malt barley got a sell, and so did protein wheat.

“We’re more dealing now with what’s left over.”

Mr Noonan said most of southern NSW’s wheat appears to have made milling grades, with relatively few cases of sprouting causing falling numbers readings to drop below 300 seconds.

“It’s pretty surprising post rain, that we still got…milling grades.

“There’s still a bit of SFW out there, but testweights held up.”

Tags: barley, canola, prices, chickpeas, pulses, faba beans, sorghum, feed wheat