HARVEST in southern Queensland and northern New South Wales is accelerating rapidly amid fine weather, and prices have softened as a result.
In the southern market, chatter is that frost damage in Victoria is not as bad as first thought, but is worse than expected in sections of southern NSW.
Significant rain in many parts of Victoria and South Australia in the past week has fallen too late for crops in earlier areas, but will preserve cereal yield potential and bolster quality in later regions.
A drought premium for SA grain has already developed, and this is likely to see consumers drag grain in from NSW or Victoria.
In the north, chickpeas are booking out all near-term export capacity, but sliding prices may see growers switch to cereals as their near-term cash crop.
Prompt | Oct 17 | Jan fwd | Oct 17 | |
Barley Downs | $285 | $285 | $305 | $310 |
ASW Downs | $328 | $330 | $330 | $333 |
Sorghum Downs | $332 | $325 | $317 Mar | $317 |
Barley Melbourne | $320 | $335 | $325 | $335 |
ASW Melbourne | $355 | $375 | $350 | $365 |
Table 1: Indicative prices in Australian dollars per tonne.
North gets busier
Nearby consumer demand is evident in the north, as feedlots look to advance coverage of barley and wheat.
Traders report some bulk-handling sites in southern Qld have already filled their allocated barley intake, which is pushing more activity into the on-farm market.
Brokers are offering some large parcels of wheat ex bulk-handling sites to the market, but this is attracting little interest from exporters as the hefty prompt-shipment program for chickpeas dominates stems out to January.
“Everyone’s preoccupied with chickpeas in the north,” Sunrise Commodities director Scott Merson said.
“We’re not engaged with the export market for wheat out of the north at this stage.”
Most growers on the Western Downs are well into their barley harvest, and some have finished, with wheat about to start.
“We haven’t seen pressure on wheat prices to push them down.”
A horribly dry season in SA has some consumers already looking north-east to fill their requirements with cheaper grain available out of northern NSW and possibly even southern Qld.
“Out of the south, the grower’s concerned about what they’re going to get; they’re not selling yet.”
Another trade source said on-farm bids for wheat and barley are sitting at $20-$30/t above depot prices, indicating willingness of consumers to book up nearby loads.
Freight is yet to become a problem, with chickpea yields in southern Qld below what was expected earlier in the season, and some transport operators from southern NSW, Vic and SA operating in the north in readiness for the peak chickpea harvest available to cart.
GrainCorp today announced it has received 1 million tonnes from the harvest to date, with Swan Hill on the NSW-Victoria border the southernmost open as yet.
Uncertainty reigns in south
In NSW, growers from Forbes south are uncertain about yield and quality in canola and cereals after a series of frost events.
It has them cautious about committing to tonnage and quality ahead of harvest, which will start in earnest in the second half of next month.
In South Australia, AW Vater & Co principal trader Kim Vater pulls no punches about the severity of SA’s growing season.
“It’s the worst year I’ve ever seen in South Australia,” Mr Vater said.
“We’ve got some paddocks in prime cropping country that we will not reap a grain from.”
Lentils remain the bright light in relative yield and price, and Mr Vater said growers may be able to afford to hang on to their wheat and barley until they see prices of at least $400/t.
SA consumers are already booking some tonnage to be delivered by road from NSW or Vic, and exporters may follow if growers decide to hold their cereals.
“End-users are buying wheat from NSW or Vic and landing it for $360.”
“It’s going to be interesting to see what happens.”
SA growers may opt to hold on to their cereals until prices rise considerably, or the season turns around for the better and they can be confident of planting a crop next year.
“They might just hang on because of the way the season is.”
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