Australia: Prompt southern wheat kicks as dry bites

Time is running out for much of southern Australia’s winter crop to receive a yield-building rain, and markets have reacted this week with a lift in values for wheat for prompt delivery.

A kick in overseas wheat values, and continuing reluctance by growers to forward sell new-crop wheat and barley, has helped to hold up northern values as the region’s big crop ripens slowly in mostly mild conditions.

In the south, consumer demand is even thinner than selling interest as trade expectations of a reasonable amount of domestic grain from Victoria and southern New South Wales build, despite the challenging season.

The market has not been able to ignore plummeting yield prospects for South Australia’s wheat, barley, and other crops.

“In the last two weeks, we have seen bid prices and volumes of feedgrains transacted on Clear Grain Exchange increase across the Port Adelaide port zone,” Clear’s business development manager Tom Taylor said.

“In the Newcastle port zone, the price moves have been more modest.

“For example, BAR1 and ASW1 in Port Adelaide has increased $20/t in the last two weeks to $320/t and $337/t track respectively, whilst in Newcastle, BAR1 has increased $1/t to $298/t and ASW1 is up $8/t to $323/t track.”

Table 1: Indicative prices in Australian dollars per tonne.

Rainfall in the week to 9am today included: Dalby 21mm; Felton 33mm; Macalister 19mm; Miles 9mm; Roma 5mm, and Springsure 18mm.

In NSW, rain was more localised, and registrations included: Gunnedah 18mm; Krui Plains 50mm; Moree 11mm; Mungindi 17mm; Pallamallawa 26mm; and Walgett 8mm.

Coupled with mild weather, the patchy rain has slowed the ripening of Central and southern Queensland and northern New South Wales crops.

It will also help later crops pile on some extra yield in the above-average to bumper season.

Barley harvesting is gathering pace in the drier parts of Qld and far northern NSW, and early wheat crops are coming off in CQ and Qld’s Maranoa district, with mostly ASW and APW grades seen so far.

“Barley is getting busier, but there are not many homes for it,” one trader said.

“Consumers have generally got some old-crop cover to the end of October.”

Even if rain at harvest impacts grain quality, northern feedgrain users are assured of plenty of volume.

“Bids aren’t moving, but offers are trying to move up.”

Long positions in the trade are hard to find, and growers are also throwing little at the market in terms of genuine offers.

“No-one seems to be in a rush for cash flow; they’ll stick it in the silos and look at it next year.”

Another trade source said the wheat are barley were at the bottom of priorities for new-crop selling.

“Chickpeas and canola will be the cashflow items; barley more than wheat will be held,” the source said.

While some grain from as far south as the south-west slopes and plains of NSW normally makes its way north into Qld to fill the domestic feedgrain deficit, the market is grain from central and south-central NSW to run south this year.

“How far it pulls from the north is the question.”

In the cottonseed market, Woodside Commodities managing director Hamish Steele-Park said values have been generally steady this week,.

“The price of cottonseed is competitive into feed rations and some feedlots are likely to lift percentages in rations,” Mr Steele-Park said.

“There’s not much export demand at the moment, so the market is more domestic orientated.

“US seed is cheaper than Australian seed on a CFR basis, but a port strike in the US at the moment is causing some shipping delays from US Gulf and east coast ports.”

Some gins have finished for the season, but others will keep running this month.

Prices for cottonseed are sitting at around $360/t ex southern NSW gin for spot delivery, while the delivered Downs market is $385/t and seed ex Moree gin is around $340/t for prompt delivery.

On new crop, ex Moree and southern NSW gins are $360/t, with delivered Downs at $390/t.

“There’s not much grower engagement in new crop at these prices.”

Primary Industries and Resources SA last month forecast SA’s wheat crop at 3.2 million tonnes (Mt), and barley at 1.5Mt, while Australian Crop Forecasters has put Victorian estimates, with some downside after last month’s frosts, at 4.1Mt for wheat and 2.3Mt for barley.

ACF’s forecast for 10.6Mt of NSW wheat and 2.4Mt of barley look comfortable, with consolidating prospects in the north offsetting some frost damage and stress due to lack of moisture in parts of the south.

“On new crop, grower confidence isn’t there to allow them to sell,” one trader said of the southern market.

“There’s more frosting risk going forward, and a lot of crops haven’t had the rain they need to finish off.”

Crops in the northern half of Vic and much of southern NSW are generally seen as needing at least 25mm of rain by mid-October to preserve their yield outlook and narrow the spread developing between the drought-hit SA market, and the soft NSW market.

“There’s a bit of old-crop trickling in.

“The Vic wheat market is trading at $25-$30/t over NSW already on old and new crop, and that could get bigger.”

The trader said the prompt and deferred barley markets were showing less impact from the dry finish to a dry season for much of south-eastern Australia.

“On barley, there seems to be enough tonnes available.”

Rainfall across southern Australia continues to disappoint, with a few places jagging double-digit falls, and others getting less, if any.

The exception is Western Australia, where some handy falls of 10-20mm in the 24 hours to 9am today will help prevent yield slides.

Registrations in Vic were generally less, and in the week to 9am today include: Coleraine 10mm; Mortlake 7mm; Nhill 7mm; St Arnaud 6mm, and Ultima 8mm.

In SA, falls include: Balaklava 11mm; Coulta 8mm; Elliston and Paskeville 10mm; Kimba 3mm; Pinnaroo 4mm; Snowtown North 5mm.

Some parts of SA’s key mixed-farming areas in the South East received 10-16mm, while others missed out.

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Tags: Australia, barley, price, wheat, crop, yield, feedgrains, winter crop, demand, markets, sorghum