Queensland grain prices continue to rally amid further declines in the dollar and uncertainties over grain supplies as large areas of Australia move into lockdown to control the spread of coronavirus.
Sharp declines in the currency caught some feed grain buyers off-guard, triggering unexpected export competition. The Australian dollar tumbled to a 17-year low of 55 cents late last week before recovering to around 57.5 cents to the US dollar on Monday.
Australian grain that was previously viewed as globally expensive is now working into overseas markets with the sharply lower dollar. Traders are reporting likely sales of Central Queensland sorghum into China last week. This was unthinkable just a few weeks ago.
Queensland sorghum values soared as buyers and traders react to the rumours of export sales to China. CQ bids were up $30 for the week with even sharper gains in southern Queensland. New crop sorghum bids jumped $48 or 13 per cent to $418 delivered into the Darling Downs.
Southern Queensland feed grain users, such as feedlots and other feeders, may have been banking on drawing on CQ sorghum from June to September, before the winter crop kicks off in October.
It now seems a large proportion of the CQ sorghum crop may be shipped to China, leaving domestic buyers to rely on interstate supplies until the local wheat and barley harvest starts.
Weakness in the Australian dollar as well as the uncertainty about supplies as most states move into various stages of coronavirus lockdown, was also supportive for Queensland wheat and barley prices. Stockfeed wheat bids gained $25 to $455 delivered into the Darling Downs in the past week while feed barley was up $15 to $385.
New crop wheat prices also moved sharply higher on the back of the tumbling Australian currency. ASX East Coast milling wheat for a January delivery finished the week at $356, up $35 for the week.
Recent warm weather has farmers looking to the skies once again for rain with pastures already starting to brown off across some parts of NSW.
How the coronavirus lockdowns that are coming into effect across Australia play out on the grain logistics is not completely clear. Many grain businesses started work-from-home procedures where possible last week. It's business as usual for grain logistics where traders are reporting strong demand.
Sign up for our newsletter to stay up to date.