Australia: Sales slow as harvest nears final quarter

Southern wheat prices have eased in the past week as new-crop becomes available from an accelerating Victorian harvest.

Barley values in the north and south are steady, while northern wheat has eased a little as the national harvest nears the three-quarters done mark.

Bids for wheat in the bulk-handling system have weakened this week by up to $13 per tonne to reflect the surge of new-crop volume now that southern Australia’s harvest is in full swing.

According to Digital Agri Services, Australia’s winter crop is around 72-percent harvested as of today, with barley roughly 75pc complete, wheat at around 67pc, with slow progress in the south dragging down the national average on cereals.

Table 1: Indicative prices in Australian dollars per tonne.

Chickpeas remain the big bulk mover out of Queensland ports, and also Newcastle, in this pre-Christmas period.

While containerised high-protein wheat is being exported in reasonable volume, bulk sales of wheat generally remain thin.

Feedlots and other consumers are chipping away on barley coverage, now extending into February for most to get them past the holiday period bookended by Christmas and Australia Day.

Wheat for anything below Hard segregations remains difficult to sell.

“On wheat, it would be hard to find a buyer for December,” one trader said of the domestic market.”

Rain is forecast in coming days for Central and southern Queensland and northern New South Wales, which could spark a round of forwarding selling by growers in the firming sorghum market.

“The sorghum price is $20 better than it was at this time last year, and they say there are up to 10 new-crop cargoes booked.”

These are all to China, and buying to fill them is expected to accelerate on any general rain events between now and February, when early crops will be harvested.

In central NSW, harvest is just about over, and has added little to the cash market outside sales to major consumers including Manildra.

“Harvest seems to have come and gone in the Central West,” Robinson Grain wheat trader Jock Benham said.

Following volume sales off the header of canola, plus some chickpeas and barley, wheat appears to be the hold, either on farm or in warehousing.

“For higher proteins, there’s a bit of demand, but everything else seems pretty challenging,” Mr Benham said of the wheat market.

While some plains and outer slopes districts in the southern half of NSW have had below-average in-crop rain, yields have been better than expected on the inner slopes especially.

Mr Benham said the higher freight costs for growers living well away from port are encouraging them to hold wheat until prices rally.

“Pricing growers are being shown…indicate the exporter is looking at a big crop. “

ASW wheat delivered Newcastle is currently bid at around $340/t, and growers unable to achieve at least $300/t on farm from that are holding rather than selling.

“With $50-$60 freight from the Central West, that’s not getting engagement.”

Victorian consumers have had a run of fitful weeks when it comes to wheat supply, based on harvest delays caused by cold weather, rain, and heat-related harvest bans.

However, volume has now hit the market with the acceleration of the harvest, and premiums that existed for readily available tonnage have evaporated as consumers book coverage into late January.

While spring rain added volume to the southern Australian wheat crop, the market’s climb went against this, and export parity.

“Supply and availability are not the same thing.”

In Young on the south-west slopes of NSW, Grain Focus principal Michael Jones said the local wheat market “tanked” yesterday, based on cuts to bids at some bulk-handling sites.

For higher-protein grades like APH and H2, drops were around $10-$13/t, no reflection of offshore moves.

Better-than-expected yields in parts of southern and south-central NSW are thought to have contributed to the drop in export-facing wheat values.

However, up-country prices appear to be holding, with ASW delivered Griffith-region consumer holding at around $330/t.

Barley values delivered port and consumer have held ground over the past week, with China business the driver.

“Barley seems to be finding export demand.”

In its review of wheat harvest activity to today, Digital Agri Services puts Victoria at 34pc through, and South Australia a little further advanced at 40pc.

Nationally, faba beans at 51pc, and oats at about 55pc are seen as the most lagging overall when it comes to harvest progress.

Tags: Australia, harvest, barley, prices, wheat, chickpeas, sorghum