Records continue to tumble as the prolonged dry weather across eastern Australia intensifies with Darling Downs feed barley hitting $400 a tonne last week.
Darling Downs feed grain prices have jumped by $20/t last week, having rallied by more than $50 in the past four weeks as buyers step up efforts to secure supplies. This comes at a time when most east coast farmers are still waiting for the traditional autumn break which is starting to look more like a winter break.
High southern Queensland grain prices is a magnet for the entire east coast and south-east Australia, pulling supplies from Victoria and South Australia. Grain from the Victorian and South Australian Mallee is being trucked to southern Queensland, pulling it away from normal domestic buyers and export markets. Grain is also being regularly railed from Crystal Brook in SA into Moree where it is being trucked into southern Queensland markets.
Soaring prices are also expected to encourage more coastal shipments of wheat and barley from SA and possibly WA to Brisbane. Several ships from SA carrying malt barley and some ASW for feed users have already been discharged in Brisbane, but the latest surge in prices may make it viable to pull the grain inland into the major Darling Downs markets.
Sorghum prices have tumbled on the news that China has abandoned its anti-dumping investigation into US sorghum. China had imposed a 178 pct bond on all US sorghum imports as a part of its investigation which was initiated in February bringing an immediate halt to imports. The bond is reportedly no longer required which should reopen the door to US sorghum imports.
News of the thawing in US to China sorghum trade had an immediate impact on local prices with traders pulling prices when it broke on Friday. A significant volume of Australian sorghum has already been sold to China in recent months.
Several cargoes of bulk sorghum have already been shipped from Newcastle to China in recent weeks. Container sorghum exports from Brisbane also picked up in March according to the ABS trade data.
Sorghum into the Darling Downs was being quoted at $375 before the China announcement but buyers went to the sidelines after the announcement.
US wheat futures ended last week sharply higher as global markets pay more attention to the desperately dry conditions in Australia, which is jeopardising the outlook for the 2018 crop. Benchmark CBOT wheat jumped by around 5pc on Friday as forecasters predicted the dry weather could extend well into winter.
Australia’s Bureau of Meteorology released its extended weather outlook for the winter months, which was sobering. The outlook for June to August predicted below average winter rainfall for WA’s grain growing regions. The forecast also pointed to below average rainfall for large areas for eastern Australia in June and July. The Bureau said that broad scale climate drivers, such as El Nino and La Nina, remain inactive.
