Australia: Summer crops soften on northern rain

Cottonseed and sorghum markets have softened in the past week on widespread rain in southern Queensland and northern New South Wales while in the south, growers are harvesting flat strap to beat the forecast rain.

Victoria’s barley harvest is well advanced, and wheat is now coming off in volume, with yields generally above average and expectations, and values easing on supply-side pressure.

Wheat protein continues to surprise on the low side, and the softer market has stimulated wheat and barley demand from domestic consumers and export accumulators.

Table 1: Indicative prices in Australian dollars per tonne.

Most of southern Qld and northern NSW has had 15-50mm of rain in the past week, and some locations have received more than 100mm.

The timing, just after the winter-crop harvest, is a little late for the ideal sorghum planting window, but the rain is nonetheless expected to spark a run on sowing of the red grain for those who have had 50mm or more.

Some growers will elect to plant mungbeans, which have a much shorter growing season than sorghum, others will maintain fallow in readiness for next season’s winter crop, and some will plant dryland cotton.

Woodside Commodities managing director Hamish Steele-Park said cottonseed values have fallen over the past fortnight in response to the rain.

“There’s speculation still as to whether the rain will add dryland cotton hectares or dryland sorghum hectares,” Mr Steele-Park said.

The prompt cottonseed market delivered to consumer in southern Qld peaked two weeks ago at $720/t, and has fallen by around $100/t since.

“Current-crop values are back to $600/t ex northern NSW gins for Nov-Dec ’23, and new- crop values are back to $470-$480/t ex northern NSW gins for Apr-Jul ’24.”

The new-crop market has also fallen around $80/t since early November, and one trader said the drop-off in grazier demand is behind it.

“Those cattle producers are going to grow some feed off this rain…and that market has shut up shop,” the trader said.

“We’re seeing offers on current-crop seed now, and that’s coming from the trade that was expecting to be selling it to the cattle producer.”

Most major consumers are partially covered out to the Apr-Jun quarter, with good-quality barley from northern NSW and southern Qld filling the order books for summer grain needs.

Victoria’s wheat and barley is pushing to port, domestic consumers and warehousing at pace as harvest hits its straps.

Watson’s Bulk Logistics has two Mallee and one Wimmera receival site, and principal Joel Watson said quality being received is good.

“On barley, we’re seeing a high selection rate for malt, quality is good, and the main reason anything going feed is varietal issues,” Mr Watson said.

“Wheat in the Mallee has just started, and most are trying to get some off before the rain comes.

“The protein is very low and H2 is going to be tight, but the quality of the APW and ASW is good.”

Mr Watson estimates 90pc of the receivals are split evenly between ASW and APW, with off spec and H2 each accounting for 5pc.

“Normally we’d get 20pc H2, and 40pc each ASW and APW.”

Mr Watson said the volume of buyers in the market has picked up since early last week.

“Over the past 10 days, we’ve had people come back into the market, and we’re finding buyers for all our grain.

“Harvest wasn’t coming in as fast as they thought it would, and the domestic market’s stepped up a little bit to get some cover.”

Mallee growers are reporting wheat yields of 4-4.5t/ha, up from the average of more like 3-3.5t/ha.

The wheat harvest is yet to start in earnest in the Victorian Wimmera, and by Sunday, all of Victoria’s grain-growing areas are forecast to receive 15-25mm, and more in places.

The southern half of NSW, where harvest is also at full tilt, is expected to receive 15-50mm, and has already had showers and storms in places.

Some cool weather and earlier showers have made progress in the southern harvest slow compared to the break-neck pace of the harvest in all of Australia’s northern areas.

That includes South Australia’s Upper Eyre Peninsula and Western Australia’s Geraldton zone, as well as Qld and northern NSW, where growers have finished harvest some weeks ahead of when they would normally expect to park the header.

On cottonseed, the prompt Riverina market is trading at $600/t ex gin, while new crop is quoted at $490/t for May-Aug 2024.

Tags: demand, harvest, barley, wheat, rain, yields, sorghum, markets, cottonseed