Australia: grain prices climb on April bookings

An unprecedented tightness in road freight, big export orders and domestic consumers’ coverage ahead of a run of public holidays have seen markets for wheat and barley ratchet higher in the past week.

Rain and localised flooding in pockets of southern Queensland and northern New South Wales are adding to the difficulty of booking trucks and picking up and delivering grain on time, and delays in shipping have further exacerbated the supply chain disconnect.

In its latest Australian Export Vessel Lineups report released March 30, Lachstock Consulting said vessel waiting times have jumped dramatically, as COVID cases proliferate, and rain and flooding impacts operations to ports including Brisbane, Newcastle and Port Kembla.

Table 1: Indicative delivered prices in Australian dollars per tonne.

Amid rain and flooding hampering grain outturn, growers are dealing with priorities of getting fertiliser from port to farm as they are flat out with field work ahead of winter-crop sowing. Planting is already taking place in some slopes and tablelands locations.

Trade sources report the planting activity is triggering some engagement from growers booking new-crop multigrade wheat contracts.

NSW registrations in cropping areas in the week include: Coonamble 26mm; Gunnedah 45mm; Mungindi 91mm; Narrabri 44mm, and Walgett 51mm.

Most of Western Australia’s growing regions have had 15-50 millimetres of rain in the week to 0900 today, which has set up a strong and timely start to winter-crop planting.

Southern Queensland also had significant rain, and sorghum still to be harvested now appears unlikely to escape widespread downgrading.

Very little rain has been recorded in South Australian and Victorian growing areas, while on coastal northern NSW, downpours brought up to 400-600 millimetres that drenched the already sodden region.

Trade sources report flood and rain-related delays in shipping out of Brisbane have led to a build-up of stocks at port, and some grain in the bulk-handling system, or track market, is making its way to up-country consumers.

“The track market has been the most liquid, and it’s growers with warehoused grain that are letting it go,” one trader said.

Bulk-handling sites with all-weather access have become popular pick-up points for consumers who are finding it hard to book grain for pick-up on farm amid rain events.

They have slowed or stopped the sorghum harvest in many districts, where some growers are concurrently trying to defoliate cotton ahead of picking, and prepare paddocks for winter-crop planting.

At Goondiwindi, Knight Commodites broker Gerard Doherty said many plains growers around Boomi and Garah had finished their sorghum harvest ahead of this latest rain, but some on the slopes have had 100mm.

“Most guys have had a crack at their sorghum, and they’ve either finished or harvested enough to cover their contracts,” Mr Doherty said.

Some downgraded sorghum is being exported in containers at a discount of more than $50/t to top-grade grain.

Barley is in hot demand from feedlotters and others, while traded SFW wheat volumes are thin.

“On barley, there’s been a fair bit of activity in the past two weeks out of the depot.”

“Barley’s probably risen $25-$30/t in the past three to four weeks.”

Mr Doherty said growers were too busy on the overlap of summer and winter cropping to be keen sellers, and some trade shorts have appeared in the market.

“I didn’t think freight could get any harder until last week; now it’s hit a new level.”

Most northern consumers are now seen as well covered for the April-June quarter, and many have made a start on July-September as fears about reduced production in Ukraine become a reality and hold up the inverse.

Big calls for road freight into Port Kembla and Victorian ports on canola in particular have reduced available trucks to a bare minimum in Victoria and south-east NSW.

Ahead of three short weeks coming in April for Easter and Anzac Day, some shorts have appeared in the market.

“The consumer has been more actively chasing grain in the past couple of weeks,” GeoCommodities broker Brad Knight said.

The delivered Port Adelaide market is continuing to pull barley and SFW wheat from the western Riverina in NSW, and the Victorian Mallee, and consumers appear to have run barley up to their price limit.

“Barley’s the one on everyone’s lips, and it’s getting tight.

“The spread between barley and wheat has narrowed.”

“That takes more barley out of the ration of barley in favour of wheat.

While every consumer has different requirements, Mr Knight said wheat could be looking more attractive by comparison to barley.

At Young in NSW, Grain Focus principal Michael Jones said growers were starting to dry-sow crops ahead of the expected autumn break, and truckloads of grain stored on farm or warehoused were largely being let go to pay for fertiliser.

He said most larger domestic consumers appeared to be covered into May and June, and were buying SFW-type wheat.

“The warehoused market is climbing up for barley, and that’s more of a Victorian influence.”

While Port Kembla’s two terminals are exporting only wheat and canola, Victorian ports are shipping barley also.

“The track market is flat for wheat…and what’s left in warehousing is getting dwindled down now.”

Mr Jones said grower selling is expected to fall away in April once new-crop planting gets under way in earnest.

GRAIN Central

Tags: grain, barley, wheat, rain, sorghum, SFW, ASW, markets, flooding, NSW, export