Southern Queensland grain prices edged higher in the past week amid signs export demand for WA wheat is improving.
Darling Downs wheat prices have been maintaining $95 to $105 premium to the WA Kwinana free in store farmer prices for some time. These costs reflect the storage and handling costs of loading the wheat onto a ship in Kwinana, shipping it to Brisbane, discharge in Brisbane and then transport to the Darling Downs.
But this spread tumbled by $11 a tonne last week to just $88/t, which is lowest in seven months on a strengthening in the WA wheat prices and laggard bids in the Downs.
WA wheat prices ended last week $8 to $12 higher amid reports that exporters are attracting increased interest from south-east Asian buyers coupled with slow farmer selling and generally disappointing yields. Southern Queensland end users and traders, who have been the best market for WA wheat for the past 12 months, were reluctant followers, with the Darling Downs prices ending the week $2 higher at $422 delivered.
Darling Downs sorghum prices continued to track wheat values.
Southern Queensland markets were firmer early in the week with end users still anxious to build more coverage.
Australia's grain harvest is advancing, but with mixed results.
The NSW wheat harvest is nearing competition, but with little fanfare. Many are now saying the NSW winter cereal harvest will fall short of last year's dismal crop. Farmers were hoping that crops may have handled the torrid season, however yields have been broadly disappointing which is reflective in the dismal grain deliveries into the bulk handling system.
Good early season rain and a mostly mild finish will ensure a good winter crop for most of Victoria. Cool weather continues to slow harvest progress, but yields have been impressive. Some farmers reporting record barley yields.
Results in SA have been variable ranging from poor to above average in the south east closest to the Victorian boarder.
Dry weather and excessive heat in September have taken its toll on crops in WA, with yields generally coming in well below pre-harvest expectations. Harvest is winding down in the state's northern cropping areas with grain deliveries sharply lower than the previous year's bumper crop. Farmers have been saying that yields have been a third to 50 per cent down on last year.
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