Australia: Prices fall on rain, offshore drop

Widespread rain across southern Australia coupled with weaker offshore markets has seen prices for feed wheat and barley fall in the past week.

Prices in the south have fallen by up to $30 per tonne on barley, and $25/t on wheat but falls have been more modest in the north, where many crops are in need of a drink to preserve yield potential.

The new financial year starts on Saturday, and growers are already giving brokers and traders offers in order to clear some current-crop stocks.

Consumers are seen as mostly well covered in the near term, and the market appears to have more downside than upside for July.

Table 1: Indicative prices in Australian dollars per tonne.

One cargo per month of barley coming into Brisbane for the foreseeable future has sent a clear signal to sellers that the local market is above world values.

While the first load of boat barley has traded predominantly into consumers in the wider Brisbane region, the second due next month could put volume further inland.

“If carriers take a load of sorghum to the port in Brisbane, and backload with barley at a discounted rate, that could work on to the Downs.”

This is seen as putting pressure on delivered prices for barley coming up from southern NSW by road.

The fall in wheat values has come largely as a reflection of the correction seen in offshore markets, and as grower and trade selling ramps up ahead of what looks set to be another big crop.

In the week to 9am June 29, northern NSW rainfall registrations include: Coonamble 7mm; Moree 15mm; Mungindi 10mm; Narrabri 31mm; Walgett 5mm.

In Queensland, St George with 11mm had the highest registration for a grain-growing region, where most locations had a dry week.

The upshot for the northern region is that while perhaps 30 percent of intended wheat area in northern NSW has not been planted due to a lack of timely rain to wet the topsoil, surrounding regions look set for another good season.

Locations in central and southern NSW to receive handy rainfall include: Grenfell 30mm; Parkes 27mm; Condobolin 24mm; Nyngan 17mm; Temora 15mm, and West Wyalong 19mm.

Looking further out, SFW wheat for July-September delivery Downs consumer has traded at $415/t out of grower hands.

Consumers are also being offered durum in all three grades at SFW prices, and poultry mills are absorbing tonnes not destined for export.

“There’s a bit more grower liquidity now; Chicago wheat’s dropped $40 Aussie in the past three nights, and there’s a more promising crop shaping up over there and over here.”

“The market here’s more comfortable, and grower conversations are picking up.

“The market’s giving back those gains we’ve seen in the past month or so.

On cottonseed, Woodside Commodities managing director Hamish Steele-Park said values have been grinding higher on a lack of offers as offers remain tight.

“Ginning is reported to be approximately 30pc completed overall, maybe a bit more in some valleys.

“Rain is delaying picking in the Riverina, and it’s only about 50pc picked down there.”

Seed is trading at around $425/t ex Moree and Namoi Valley gin, $485/t delivered Downs, and $470/t ex gin July-August in the Riverina.

“Liquidity has been very low over the past couple of weeks due to a lack of offers, and only small volumes are trading.”

Crops over much of south-eastern Australia have had an ideally timed 15-25mm of rain in the past week.

The falls have put good moisture under crops from the Lower Eyre Peninsula of South Australia into central NSW.

This has encouraged growers to spread urea ahead of the latest rain-bearing front, and book up additional loads to spread ahead of the next.

Barley on farm in Victoria and South Australia is trading for under $310/t, in line with export parity, while southern NSW is about $20/t dearer if it can price into the delivered Downs market.

Some growers in the Murray-Mallee were sowing cereals as late as last week, in the very end of their planting window, and others that missed out on the past one or two rain events are in need of a drink to get crops up and away.

Tags: rain, yield, feed wheat, stocks, sorghum, markets, cargo, Australia, barley, prices, crops