Australia: BSGI news lifts thin southern market

Russia’s withdrawal from the Black Sea Grain Initiative has turned what could well have been a bearish week bullish, as exporters rethink their ideas on elevator margins out of eastern Australia.

With Ukraine exports via the Black Sea thwarted for now, grower ideas about where bids should be have also risen, and this is limiting volume traded in south-eastern Australia, where most crops are enjoying good to ideal growing conditions.

In north-west New South Wales, conditions remain too dry for winter-crop planting to continue, and supplementary feeding of cattle has ramped up in the northern region generally.

Table 1: Indicative prices in Australian dollars per tonne.

Consumers are buying grain from east, north and south to satisfy building demand seen as feedlots operate at capacity, and graziers supplementary feed their own or trade cattle.

“Southern Highlands wheat is working into the Western Downs,” one trader said.

Up-country demand has also lifted, as opportunity feedlotters recommission their on-farm set-ups not used by most since the 2017 to early 2020 drought.

“I’ve had about 10 people ring this week and want 1000 tonnes of grain each.

“That market’s definitely going again.”

Boat barley ex Brisbane is offered at a steady $385/t free on truck, which has capped the delivered Downs market at $425/t.

Western Downs feedlots are continuing to buy barley out of central and south-central NSW, and boat barley is flushing out some local stocks from growers who believe the market will not ratchet higher.

“We’re waiting for new-crop now.”

Harvest in Central Queensland is expected to start in mid-September, and late September on the Western Downs and south-west Queensland.

Large-scale consumers in the poultry, pig and feedlot sectors are seen as mostly covered into new crop.

However, the failing season for much of north-west NSW, coupled with a jump in export bids based on the cut in Black Sea grain supply, has exposed some shorts among smaller consumers.

In the sorghum market, container packers

On the back of offshore rallies, export interest in wheat and barley has lifted.

While the indicative market for barley has risen $10/t over the week, wheat is up $20/t.

“Barley seems to be easier to get than wheat, and there’s more canola on farm than we thought,

“They’re aren’t huge amounts of wheat in stockpiles on farm.”

Trade sources have said the type of wheat optional-origin traders are chasing now that the BSGI is in hiatus is in particularly short supply in Victoria.

It means eyes are turning to stocks in southern NSW, where northern buyers are sourcing grain to supply domestic consumer demand.

“The markets are very wide,” one trader said.

Following weeks of showery weather, growers in Victoria and southern NSW are top-dressing crops if urea is available, and applying herbicide and fungicide.

“We’re seeing people catching up because it’s been so wet.

“The trade isn’t active into domestic homes.”

Tags: Black Sea, sorghum, SFW wheat, demand, Black Sea Grain Initiative, Australia, Ukraine, Russia, exports, barley, crops