Australia: Western Australia lupins help cover last drought needs

Promt trade in feed wheat and barley has thinned as graziers and their suppliers concentrate on other inputs to get them through to spring.

That includes a 22,000-tonne cargo of lupins coming into Victoria from Western Australia.

In the north, growers remain uninspired by prices on offer, and some are looking for rain to bolster yield potential.

In the south, recent rain and lengthening days have crops ready for a growth spurt when the weather warms up, but growers are in the main too uncertain about yield prospects to commit to forward sales.

Table 1: Indicative prices in Australian dollars per tonne.

Containerised and bulk high-protein wheat is continuing to make its way out of Brisbane, and accumulation is ongoing for an unseasonal cargo of feed barley.

“There’s a real stand-off at the moment; the trade is seeing the north as the cheapest origin…and the grower is not willing to accept the price.

“The grower didn’t like the price for seven months, and they still don’t like it now.”

It means the trade is having to cover some short positions into feedlots and export in what looks like being a short-lived rally.

After a stellar start to the season, some crops from the upper north-west plains of NSW through to Central Queensland could do with at least 25mm of rain in coming weeks to shore up yield prospects.

Without a major price rally, Mr Merson said growers were unlikely to advance sales of current-crop cereals, or make a start on new crop, while it stayed dry.

“After we get some spring rain, they’ll be more comfortable.”

Chickpea and faba bean cargoes once again look like populating the front months of the shipping stem.

“There’ll be another big chickpea crop, and that will get exported early; that will be their cash crop.”

Faba beans are expected to feature alongside chickpeas as the first winter crops to be sold by growers.

Over the past fortnight, cottonseed prices have dropped $5-$10/t in the north and $15-$20/t in southern NSW as drought demand softens.

In the Gwydir Valley, cottonseed ex gin is down $10/t to $410/t, while in southern NSW, values have dropped to $435/t ex gin from $450/t.

“While domestic demand is still evident, a lack of export demand is not supportive of values,” Woodside Commodities managing director Hamish Steele-Park said.

“Ginning is also starting to catch up after a late start and no stocks at start of the season.”

The big news in the south is the arrival of 22,000t of lupins from WA, with the vessel now on the berth in Geelong after loading at Kwinana.

Organised by Orange-based firm CL Commodities, the cargo has taken the heat out of the Vic market, where lupin prices have recently retreated from the highs of $730/t on farm to around $650/t ex Geelong.

Reid Stockfeeds commodity manager Justin Fay said while soymeal and palm kernel extract, as well as the WA lupins, will help to supply the protein component of animal diets, roughage remains very hard to find.

“They still need silage or hay,” Mr Fay said.

In Vic’s Western District, barley is still in demand locally, trading at a premium of around $10/t over wheat, and closer to $5/t over in the Goulburn Valley.

“The availability for barley gets better as you get further north.”

Mr Fay said the shortage of fodder could spell an early end for crops, even in the Western District, which has generally got the best of Vic’s rain this winter to date.

He said some Vic crops were up to six weeks behind their normal development due to the late break.

“There’s certainly going to be a yield penalty of 15-20 percent, after coming into the whole sowing period without subsoil moisture.”

“What we might see with crops…with a yield penalty is more cut for hay.”

Working on back-of-the-envelope figures of $350/t for wheat and $800/t for hay, Mr Fay said a predicted grain yield of 1.75-2t/ha instead of the average 2.5t/ha would make cutting for hay a much better prospect.

This is based on hay yield being roughly double that for grain.

With most hay sheds across SA, Vic, and southern NSW being as empty as the day they were built, and livestock prices still high, everything is pointing to a larger-than-normal proportion of the grain crop being cut for hay this spring.

Barring the inner slopes of southern NSW, the south’s crops are generally three to six weeks behind where they would normally be due to opening rain falling in early June, rather than the ideal late April.

At Wagga Wagga, Peters Commodities trader Peter Gerhardy said crops were “conservatively three weeks late”.

“It’s patchy across the board and…my growers are in a holding mode,” Mr Gerhardy said.

Canola has in recent years been the growers preferred cash sale at harvest.

Mr Gerhardy said that may change this year because of the reduced canola area, largely because the oilseed likes an early rather than a late start.

“Everyone’s got a story where they dropped out a paddock or two, or resowed some canola.”

Unlike most years, very few livestock are grazing dual-purpose crops this winter, and only the occasional canola crop had stock on it to stop it flowering prematurely.

South Australia, Victoria and southern NSW all have ample stocks of wheat on farm and in storage, and Mr Gerhardy said consumers were “not coming out chasing volume”.

However, barley is in short supply, and may start to work its way south from central NSW.

Tags: sorghum, feed wheat, barley, prices, yield, feed barley, lupins