Australia: Northern prices stabilise as pace picks up

Trade activity is picking up in the north as consumers start to extend coverage well into next year, and growers quit current-crop tonnage ahead of harvest.

October markets are showing a considerable discount to prompt bids to reflect impending pressure from the thumping northern New South Wales harvest.

In the south, a mostly dry week has concerns building about what a lack of finishing rain will do for the many crops with insufficient subsoil moisture at their disposal.

This has been insufficient to arrest a further drop in southern new-crop wheat and barley prices.

Table 1: Indicative prices in Australian dollars per tonne

Harvest is gathering pace in Central Queensland, the Dawson-Callide and pockets of south-west Qld.

Qld’s barley harvest is expected to start on the Western Downs and in the Maranoa in early October, and one trader said barley appeared to be shaping up as a cash sell off the header.

Volume traded has picked up, with some feedlots now starting to book SFW-type wheat as far out as the September 2026 quarter at $327/t delivered.

“Where we are at the moment with a wheat market of $312-$320/t delivered Downs, I’ll buy it all day,” one trader said.

Growers’ ability to store a lot of grain on farm for a long time is not being underestimated, and is boosting the consumer’s willingness to book up current offers.

“I know we’re going to have record storage in grain socks, and more bunker storage is being built.”

Also on the consumer’s mind is the need for export-facing supply chains to receive and out-turn volume to make use of their assets.

“It’s all a couple of bucks firmer because of those reasons.”

Barley in the north appears less likely to buy export demand in the near term, and is expected to come under harvest pressure in October-November as the cash sale of choice alongside chickpeas.

The trade is reporting Nov-Dec barley trading delivered Downs at $285/t, reflecting the weight of harvest pressure.

Early harvested wheat from the Maranoa and Western Downs, where in-crop rain was generally below that of the central and inner downs and northern New South Wales, could well achieve milling grades as high as the top-shelf Prime Hard.

As a result, feed wheat could be in limited supply in the early stages of harvest, but mountains of it are expected once harvest gets into the Golden Triangle of far northern NSW, where good in-crop rain means ASW, APW and H2 grades are expected to dominate.

Yield prospects are becoming clearer in the Qld and northern NSW.

Very roughly, Maranoa and western Downs crops look likely to return 2.5-3t/ha, and the Goondiwindi-Garah regions 4-5t/ha, while crops east of the Newell Highway, including the Golden Triangle, could well yield 6-7t/ha.

Silage is being cut from dedicated crops by and for feedlots and dairies, and the nation’s haycutting season is off and running in Qld and NSW.

Feed Central founder and director Tim Ford estimates cutting of Darling Downs hay is about halfway through, and yields are well above average.

“There’s talk of a lot of hay being made in southern Qld, and people keeping a fair portion for themselves, and over-the-fence trade,” Mr Ford said.

This is expected to extend south to around Parkes, where the season starts to get patchy, particularly on the plains and outer slopes.

In places south and west of West Wyalong, crops that missed the best of last week’s rain may be cut for hay, particularly if the grower runs livestock.

“Rain last week certainly did fix a large part of NSW up; if they got rain, they’ll keep going with grain.

“Over the next two weeks, there’ll be a lot of decisions being made, and because grain prices have come back a bit, people are looking at hay as an option.”

Strength in cattle, sheep and lamb markets is a further sweetener to those who are interested in finishing their own progeny, or buying in stores to fatten.

Now that the frenetic call for hay from graziers in South Australia, Victoria, and southern NSW has fallen away, Mr Ford said demand was widespread geographically and across sectors, but modest overall.

“Everyone’s buying a little bit; that’s graziers, feedlots, and dairy farmers.”

Cereal hay is currently trading at around $350-400/t hay on farm, and the market is expected to soften as the haymaking season moves south.

“It’s exporters down there that set the price, and export hay guys in Vic and SA are all sitting on the fence.”

The wild card is whether the remainder of spring turns out to be wet, as indicated by the Bureau of Meteorology’s latest outlook issued today which points to a 60-80 percent chance of above-average rainfall for eastern Australia in the coming quarter.

“If there’s a short dry spring, the market will heat right up.”

Patchy rain in SA and Vic in the week to 9am today has been ideal to keep crops on track for mostly average yields at best.

However, the lack of subsoil moisture in most areas is of massive concern now that earlier crops are susceptible to frost damage.

Temperatures for the coming week are forecast to be mild, which is ideal for the crops, given their delayed development after a late germination.

At Young, NSW, Grain Focus managing director Michael Jones said lack of subsoil moisture to finish the crop, as well as uninspiring prices, have limited forward sales from growers.

“We need another decent drink; there’s not a lot of subsoil, and frost is still a risk.”

In the up-country market, one major consumer in southern NSW is bidding $20/t below the prompt price for October-delivered wheat.

This represents the usual inverse seen at harvest, and is evidence of the overall south-eastern Australian crop being big, despite limited subsoil moisture south of Parkes and into SA and Vic.

Mr Jones said grain stored by growers on farm appears to be low, possibly because it has been value-added through sheep and lambs.

“There’s not the volume of on-farm grain we’d normally see at this time of year.

“There’s a small amount of demand for a small amount of supply.”

Tags: harvest, barley, prices, wheat, sorghum