Australia: South rallies on slow wheat harvest

Wheat prices have continued their rise in Victoria to reflect the fitful start to harvest, while northern values have moved little amid subdued consumer demand.

In Vic, cold and wet weather has further delayed ripening and harvest of the state’s wheat crop, although new-crop is expected to start flowing to market once warm to hot arrives from today.

Table 1: Indicative prices in Australian dollars per tonne.

Growers and traders in the northern region are pricing some new-crop sorghum, with yield prospects for earlier-planted crops looking solid.

This is reflected in latest figures out from ABARES, which have lifted the estimate for Queensland sorghum from 1.61 million tonnes (Mt) seen in September to 1.676Mt now, and New South Wales from 830,000t to 890,000t.

On wheat and barley, H2 wheat for export is attracting the most business, and trading at around $368-$370/t delivered Brisbane.

“It’s the Mexican stand-off on barley; consumers are sitting on their hands,” one trader said.

With rumours rife that India will increase its tariff on chickpeas, some in the trade are expecting that market to soften, and grower interest in selling barley and wheat to pick up into the New Year from those looking for some post-harvest cash.

However, consumers are largely seen as comfortable.

Cottonseed has been removed from most feedlot rations due to canola meal at around $525/t being seen as better value than current-crop cottonseed at a hefty premium to new-crop.

Unseasonably cold and wet weather in Vic has made for another slow week of harvest, parking up growers and contractors who are ready to roll once crops and paddocks dry out.

In the Mallee, some growers started yesterday on lentils ahead of getting going again on wheat and barley today, provided winds and high temperatures do not lead to a harvest ban.

In the week to 9am yesterday, higher Vic rainfall registrations included: Dimboola 32mm; Goroke 28mm; Inverleigh 21mm; Nhill 29mm; St Arnaud 24mm; Walpeup 14mm, and Werrimull 17mm.

In the Murray Valley, growers are well advanced on their barley harvest, and just starting on wheat.

“The barley’s been above expectations yield wise but mixed quality, with some high and some low testweights,” one trader said.

“We’re just starting to see early wheat after a few days of rain, and some high protein – APW and AUH, and 5-10 percent screenings in places.”

Grower selling of cereals remains thin.

“There’s not a lot of grower selling at site; growers are selling their canola at $800 and waiting for an increase on cereals.”

However, higher-than-expected yields for many are slowly increasing interest in selling at around $275-$280/t delivered up-country consumer for barley, and in the low $300s for wheat.

Traders have said growers who were expecting 3.5-4t cereal yields are getting 4.5-5t instead, and can therefore see an improved gross margin, even at low-decile prices.

Pinion Advisory Horsham-based broker Andy Brown said malting barley at $10/t more than feed, lentils at more than $600/t, and canola remain the cash sells for most growers.

“A lot of malt’s getting cashed at these sort of levels, but there’s not much wheat coming off,” Mr Brown said.

“There are still a few shorts in the market; wheat’s a lot later than they thought.”

Mr Brown said most growers have finished cutting and baling hay, and are ready to go full tilt on harvest.

“Everyone’s got a spring in their step.

“We’re hearing guys from the Mallee are happy with yields, and quality’s good.”

While some rain has fallen recently, it has mostly been followed by windy weather which has dried grain out.

Tags: export, barley, prices, wheat, crop, yield, sorghum