GENERAL rain forecast for coming days for South and eastern Australia’s growing areas has seen prices drop in all quoted markets.

The Bureau of Meteorology forecast shows at least 25mm for almost all the winter-cropping zone, and at least 15mm for summer-cropping areas into Queensland.

The rain will not be enough to spark a widespread winter plant in northern New South Wales or Qld, but will shore up prospects for southern crops as sowing continues at pace.

In commentary released Monday by Clear Grain Exchange, managing director Nathan Cattle said buyer bids softened through last week as international futures markets backed off their recent peaks, and the Aussie dollar stayed up near 72 US cents.

“This saw buyers take a more conservative approach to pricing grain last week; importantly, they stayed very interested in buying grain,” Mr Cattle said in the report.

“The demand for grain has not evaporated; it is the price that buyers have become more conservative on.”

Cargo talk

Speculation around a cargo of South or Western Australian wheat coming into Brisbane in July abounds to counter sluggish selling from northern growers, as discussed today by GrainCorp managing director and chief executive officer Robert Spurway.

Speaking around the announcement of GrainCorp’s half-year results, Mr Spurway responded to a question about the possibility of GrainCorp shipping domestic grain to help satisfy demand in southern Qld and northern NSW.

“Certainly the way the market is pricing it, that is likely that you’ll see in the order of one vessel volume, so let’s call it broadly 50,000 to 100,000 tonnes of demand not satisfied,” Mr Spurway said.

“There’s probably not a huge role that we will play directly in that unless we’re able to see the margin in that.

“We’re always looking at where we can sell grain and get the best possible return for it.”

Mr Spurway said the scenario has created “an interesting dilemma” around how much grain is on farm.

“The way the market is pricing it certainly would create a dynamic or [is] close to creating a dynamic where an import of grain from likely WA into the Brisbane port zone for northern New South Wales and southern Queensland would make commercial sense,”

Trade sources have told Grain Central that wheat free on truck (FOT) Brisbane is being offered for July at as little as $430/t, but this does not mean a vessel has been booked.

“I think (FOT) sales were made, but the smart move as a trader is to…buy local if the market drops,” one trader said.

He said some in the trade could not see a margin in bringing boat wheat around until the Brisbane FOT market hit $450/t.

	May 7	Today
Downs barley	$446	$438
Downs SFW	$437	$427
Downs sorghum	$375	$380
Mel barley	$350	$345
Mel ASW	$367	$365

Table 1: Indicative prices in Australian dollars per tonne.

North needs more than forecast

Rain on the forecast and the possibility of a wheat vessel coming into Brisbane have seen northern feedgrain values drop by up to $10/t in the past week.

With prices softening, growers are not offering much volume because they can only see a small winter crop for the northern region based on planting prospects over coming weeks.

Knight Commodities Goondiwindi-based broker Gerard Doherty said 20-30mm north of Parkes would get some winter crop planted, particularly in the Golden Triangle region north-east of Moree.

“If that’s the case, they’ll only get 10 to 15 percent of their area in.”

“A lot of growers are still bone dry.”

Barley, wheat, and chickpeas are likely to be the preferred plant from here on in, with the window well and truly closed on faba beans and canola.

Mr Doherty said barley demand has eased considerably this month.

“Some consumers are tapering off barley as we head into winter; it’s tough to buy,” Mr Doherty said.

While larger feedlots have generally switched to wheat, and pig and poultry operations are using sorghum, smaller feedlots and graziers on the northern NSW slopes and tablelands are chasing barley, faba beans, and cottonseed.

Robinson Grain Toowoomba-based trader Anthony Furse said many growers will be looking for 50mm or more to plant.

“I feel there’s so much nervousness about the weather going forward and…there’s plenty of drought feeding going on back into the hills,” Mr Furse said.

Grain from the Central West of NSW is continuing to make its way north to graziers and feedlots from the plains to the Downs and the New England.

Bulk sorghum exports ex Brisbane appear to have slowed or stopped after growers sold what they could not fit in on-farm storage.

“Growers sold their overflow hard and fast, and a lot of guys, because it’s been dry, kept a lot of stock on farm.”

Pig and poultry farms are seeing sorghum as an increasingly attractive option because of its discount to wheat, and growers appear happy to sell direct to the local consumer.

Northern NSW drought and supplementary feed demand spreading into the New England has lifted cottonseed values to well above export parity.

Woodside Commodities managing director Hamish Steele-Park said volumes trading are generally “on the smaller side” due to the nature of the demand.

Prompt values are sitting at around $600/t ex northern NSW gins.

“The cottonseed market continues to be dominated by drought/supplement grazier demand across northern NSW,” Mr Steele-Park said.

“Values remain very high and there are no exports at these high prices, and unlikely to be in the near term unless a major price correction.”

Ginning is now in full swing now, and Mr Steele-Park said cottonseed’s high price has fully or partly pushed it out of feedlot rations to incorporate other meals/less cottonseed

South shapes up

In contrast to the north, rain on the forecast for coming days will consolidate crop prospects in South Australia, Victoria and the southern half of NSW.

As grower demand for urea for top-dressing increases, and rain prompts post-emergent herbicide applications, some are also seeking cash flow.

“Bills are starting to come in for fertiliser and chemical; the cost of everything has gone through the roof, and growers need to pay for it,” Pinion Advisory Horsham-based broker Andy Brown said.

Most SA, Vic and southern NSW are seen as 50-80pc through their winter-crop seeding programs, with canola and pulses mostly done, and a fair amount of wheat and barley to go in the ideal window.

The modest amount of grower selling of warehoused or on-farm grain and pulses is being met by consumers.

“They’re buying hand to mouth, and starting to get a bit more cover.”

Mr Brown said barley from the Mallee was being trucked to feedlots in southern NSW.

“In the last couple of years, nothing has headed north; what I say is anything from the NSW-Vic border heads south.”

However, dry conditions in northern NSW are gobbling up local hay and grain, and Mr Brown said Vic hay is moving as far afield as the New England.

“We’re sending a fair bit of hay north.”

Faba beans are also in demand, and volume is running down after a surprisingly large export program to Egypt.

“There is a bit of demand there for fabas, and there are not a lot left.

“A lot of guys are using them in sheep rations.”

Faba beans a trading at around $430/t on farm in the Wimmera, and above $480/t delivered Portland for export, with a premium being paid to get them out of the domestic market.