Australia: Prices firm as rain slows Queensland harvest

Values for most markets quoted have firmed in the past week in response to international and domestic factors.

On the local front, storms have brought rain and hail to parts of Queensland where harvest is gathering pace, and frosts have further impacted yield potential of some crops around the Victoria-South Australia border.

In far northern New South Wales, harvest has started in the past week on a number of farms, while in the state’s far south, frosted crops are being cut for hay after receiving limited in-crop rain.

Consumers are advancing coverage in all states, with a big crop from northern and central NSW the buffer for feedmills in the south.

Table 1: Indicative prices in Australian dollars per tonne.

Some wild storms over the past two days have dumped 80mm or more of rain on isolated crops in southern and Central Qld, but plenty of gauges registered not a drop.

Storms have also brought hail and wind to some districts.

With good drying weather following, traders told Grain Central the storms will have little to no impact on most Qld growers, but have been devastating for others.

The Jandowae district north of Dalby is particularly hard hit, with one grower said to have lost 300t of ripe barley to hail.

Goondiwindi-based Knight Commodities broker Gerard Doherty said some of the wider region’s high-yielding crops had lodged prior to the storms.

“There are a few problems out there,” Mr Doherty said.

“There’s quite a lot of lodging, and now they’ve had the storm on top, that’s not great.”

While Downs crops generally missed out on a rain to maximise their yield potential, some northern NSW and border-region crops got lucky.

“Barley’s been coming off for the past two or even three weeks, and there are some outstanding yields of 4-6t/ha.”

Mr Doherty said with many consumer sites full for now, a lot of barley is going from the paddock into on-farm storages or warehousing as its $40-$45/t discount to wheat in the prompt market buys it demand.

“Everyone realises barley is quite cheap.”

The northern wheat market is not as active, even though the Western Downs harvest is in full swing, notwithstanding recent rain for some.

Mr Doherty said some growers have forward sold as much as half of their expected tonnage.

With yield and quality prospects generally good to very good, concerns about not being able to honour those contractual commitments are limited.

However, concerns are building that general rain forecast for NSW and southern Qld next week will impact quality.

“The weather’s got everyone spooked.”

One trader said consumer interest in extending coverage has picked up in recent days.

“They’re taking a phone call, which wasn’t happening last week,” the trader said.

“If you can move it quickly, barley is in demand.”

The trader said while this week’s storms have done a great deal of damage to some crops, the overall impact on the market will be short-lived as roads and paddocks here and there drain.

“It’ll be awkward for 48hrs.”

On the positive side, rain has been ideal for sorghum already in the ground, and for those who are keen to plant this month.

“Rain now is excellent for sorghum; three or four weeks ago it was really struggling,” Mr Doherty said.

With old-crop stocks just about sold out by the grower, the absence of forward selling has quietened activity in the south as the reality for many of below-average cereal yields hits home.

“Growers are not participating in the marketing of new-crop grain,” Peters Commodities trader Peter Gerhardy said.

“They’re sitting back and seeing what is going to happen with quality and price.”

Mr Gerhardy said growers were also loath to expose themselves to the possibility of having to wash out contracts or buy in forward-sold grain their own farms would not be able to supply in volume, quality, or both.

“Those games are nasty games, those washouts.”

While both SA and Vic will have comfortable export surpluses of wheat and barley from the upcoming harvest, volume will be well down on the norm.

In the southern third of NSW, where frost has had an impact in some districts, crops with a low yield and/or quality potential are being cut for hay, as they are in Vic and SA.

“Growers with all their own haymaking gear…are cutting for hay now.”

That hay is either being sold for cash, fed to stock, or used to replenish on-farm reserves depleted over what for many has been an extremely dry year to date.

Parts of south-eastern Australia have had light rain in the past week, enough to preserve yield potential in cereals in some cases and soften the impact of frost.

Provided rain does not hit at harvest, quality of wheat and barley from the northern half of NSW is expected to be high after its stellar growing season and minimal frost damage.

“If barley from up there is $240-$260/t on farm, plus $80-$90 for freight, it’s not going to work into Melbourne.”

Mr Gerhardy said south-central NSW is looking like a good place from which to source plump feedgrain.

“Some Vic and SA buyers are trying to suss out NSW already.”

In SA, Platinum Ag agronomist Phil Holmes said significant areas of canola followed by wheat have been cut for hay due to their low yield potential after a dry growing season and a frosty spring.

“Canola and wheat are the worst affected,” Mr Holmes said.

“People are well and truly into haycutting.

“In most drought-affected crops in the Mid North, sheep have been put into them, and in some cases, they’re out of them already.

“With hay, yields are lower than average, but what’s there is going to be good quality.”

Mr Holmes said hay yields of 2t/ha for canola and 2-4t/ha for wheat were being seen in the region’s truly awful season.

On the plus said, Mr Holmes said plenty of fully formed seeds can be seen in ripening wheat heads, so what will be harvested should be of sound quality.

“Looking at rainfall for Clare, 1914 was the driest to the end of September with 200mm; we’re at 207mm, so only 7mm ahead of then.”

“There’s just not going to be much hay about.”

Mr Holmes said some larger livestock operations were buying hay in from NSW to supplement what is available locally, and hopes were high for even 10-12mm of rain before the month is out to help crops fill and pasture grow.

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Tags: harvest, barley, yield, sorghumwheat