Posted on August, 28, 2024 at 08:28 am
PRICES for feed grain have fallen by up to $25 per tonne in the past week as global markets sink under the weight of the Northern Hemisphere new crop.
Coupled with ongoing concerns about a lack of general rain in much of South Australia, Victoria, and the far south of New South Wales, the low prices have doused grower interest in selling on-farm, warehoused, and new-crop grain.
In the north, the season is one of boundless promise, and trade sources say a few consumers are starting to look for Sep-Oct deliveries to ensure they are covered ahead of new crop hitting the market in volume.
| Prompt | Aug 15 | New crop | Aug 15 | |
| Barley Downs | $335 | $340 | $320 | $340 |
| ASW Downs | $338 | $355 | $320 | $340 |
| Sorghum Downs | $338 | $335 | $330 | $330 |
| Barley Melbourne | $320 | $335 | $310 | $332 |
| ASW Melbourne | $340 | $352 | $330 | $355 |
Table 1: Indicative prices in Australian dollars per tonne.
Prompt barley in the northern market showed the smallest price drop of any quoted winter grain this week, with tight stocks and some spot demand from the beef and dairy sectors supporting the market.
“Barley stocks are really tight, and some of the smaller guys are going to hand to mouth; dairy’s buying too,” one trader said.
Stockfeed millers and larger feedlots are also “kicking tyres” for September deliveries, as a soft close for the Central Queensland and Maranoa growing seasons will arrest the amount of new-crop grain hitting the market early.
“There are some spot buyers out there.”
Qld had only sprinkles of rain in the past week, which is no cause for concern, and northern NSW had little, with Quirindi on 11mm the highest total registered.
Central and southern NSW had some registrations of 10-20mm at locations including: Temora 18mm; Trangie 12mm; Dubbo and West Wyalong 15mm, and Young 19mm.
Clear Grain Exchange general manager Trent Smoker said demand is being seen as the market softens, with ASW1 wheat trading at $310/t Melbourne port equivalent this week, down from $327/t last week, and BAR1 at $300/t, down $15/t.
“Published bid prices and trade values have generally continued to soften this week, although buyer interest in trying to buy grain remains robust,” Mr Smoker said.
“Generally, trading volumes are modest as sellers hold firm on their price ideas, while buyers are actively trying to buy grain.
Mr Smoker said 40 buyers have actively placed bids on both warehouse and ex-farm grain this week on CGX and igrain, in some cases, have stepped up to meet sellers’ price ideas.
“As an example, BAR1 barley traded $320/t Adelaide port equivalent yesterday, $20 above the best published bid.”
Watsons Bulk Logistics managing director Joel Watson said the northern Mallee was still relatively dry, with small amounts of rain here and there propping up yield potential for now.
Showers are forecast for Vic in coming days, but Mr Watson the crop remains exposed because of its late establishment.
“In the Wimmera, crops are about four weeks behind down there, and they’ll be relying on a kind finish,” Mr Watson said.
As grain markets fall, mixed farmers are running the ruler over their options for what could be low-yielding cereals selling into low-priced markets versus the relatively stronger lamb market.
Mr Watson said the lack of biomass in many crops could be what sees them push through to harvest.
“For a lot of areas, the crop doesn’t have the density to cross it over into hay.”
Concerns about the season, and falling nearby and new-crop prices, have made grower offers hard to find.
“Growers have gone to ground.”
“They don’t like the prices, and new crop has a rather large question mark hanging over it.”
Mr Watson said average rainfall for the closing months of the growing season could see Vic growers get an average crop, but dry conditions will clip yield potential.
In SA, Pinion Advisory commodity risk manager Chris Heinjus said much of the state’s crop was in a situation as precarious as Vic’s.
“We’re on a knife edge,” Mr Heinjus said.
“We’ve had a little bit of rain…and that’s bought us another week, but we’re running three or four weeks behind where we should be.
“Our production risk is still quite real, and there are some areas that probably won’t make it.”
While some crops in SA are traveling reasonably well, Mr Heinjus said overall the crop will be nothing to write home about.
“There’ll be a crop, but I doubt very much it’ll be even an average one.”
Some growers in south-eastern Australia have received handy rain in the past week, but those that missed the falls are crossing their fingers for what has been forecast.
In Vic, higher registrations in the week to 9am today include: Dimboola 17mm; Goroke 43mm; Murrayville 8mm; Nhill 14mm; Rupanyup and St Arnaud 27mm, and Woomelang 9mm.
In SA, some gauges got nothing in the past week, but others got handy falls, including: Clare 31mm; Cummins 15mm; Coulta 20mm; Keith 25mm; Maitland 27mm; Roseworthy Ag 16mm, and Snowtown North 22mm.
Source: Grain Central