Grain prices edge higher on southern rain

Grain prices edge higher on southern rain

Agribusiness
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Wheat prices rose last week as rain in south eastern Australia stalled early grain harvesting.

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Southern Queensland wheat prices firmed last week as widespread rain in south eastern Australia stalled early grain harvesting, forcing some buyers to chase prompt supplies.

Darling Downs stockfeed wheat bids were $3-5 higher for the week to $420 for a spot delivery. Barley prices fell as new crop supplies from WA started to arrive into the Darling Downs. New crop barley bids slipped to $365 a tonne into the Darling Downs.

Sorghum prices continued to push higher on the worsening outlook for the 2019/20 crop. New crop sorghum bids were up $10 for the week to $390 delivered into the Darling Downs and $400 delivered Brisbane.

Chances of a meaningful sorghum crop are looking slim amid the lack of spring rainfall and ongoing hot temperatures. Time is rapidly running out for farmers to receive the necessary 100 millimetres-plus of rain needed to trigger a general sorghum planting across the Darling Downs and northern NSW. Without a major rainfall event in the coming weeks, farmers will look ahead to the 2020/21 winter crop.

Table 1: Queensland grain prices. Source: Lloyd George

Table 1: Queensland grain prices. Source: Lloyd George

Grain buyers are anxious to see some warmer temperatures in south eastern Australia to accelerate the harvest pace. Recent rain followed by unseasonably cold weather has delayed the general start to the southern NSW and Victorian grain harvest. Melbourne buyers are paying $30 to $40/t premium for old crop wheat supplies as they wait for the new crop harvest to get going.

Barley markets remain soft as traders wait for a decision on China's antidumping investigation which is due any time. Weakness in barley prices in WA, SA and Victoria has been putting pressure on the Darling Downs values in recent weeks.

Government trade data showed that Australia exported 921,000 tonnes of wheat in September which was the largest monthly exports in four months. Australia's final October to September 2018/19 marketing year exports fell to 9.0 million tonnes which was the smallest since 2007/08.

Ongoing drought means the Australia's 2020/21 grain exports are unlikely to improve. In its recent November world supply and demand estimates report, the USDA lowered its forecast for Australian 2020/21 wheat crop to 17.3 million tonnes with exports of 9.0 million tonnes. Some private forecasters are now saying Australia's up coming wheat harvest could be as small as 15.5 million tonnes.


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