South-eastern Australian feed wheat values tumbled last week as the full extent of the weather induced downgrading to the NSW wheat harvest was realised.
Millions of tonnes of what was previously expected to be milling quality wheat is now finding its way into feed markets.
Traders are saying that more than half of the NSW wheat harvest is expected to be downgraded to general purpose or stockfeed quality after being swamped by 100-200 millimetres of rain in days before crops were ready to be harvested.
Stockfeed wheat prices into southern NSW, Victoria and South Australia tumbled by upwards of $20-$30 a tonne last week, as large volumes of feed grain began to find its way into domestic markets. Stockfeed wheat is being sold $345-$350 delivered into Melbourne, down from more than $370 a week earlier.
Downgraded wheat from southern NSW is also finding its way into SA feed grain hubs around Adelaide and Murray Bridge.
Southern feed barley values have also fallen as the flood of stockfeed wheat comes onto the market.
High freight costs and limited feed wheat supplies in the northern half of NSW is keeping the northern grain markets supported. Darling Downs stockfeed wheat values finished last week unchanged at $325 delivered, while barley was down $10 at $290.
Some of the feed wheat has also been sold into export markets. Newswires are reporting that 1.25 to 1.75 million tonnes of east coast feed wheat may have been sold into China last week. Other Asian feed grain buyers are also expected to be interesting in securing Australian feed wheat at the expense of other feed grain alternative such as corn.
Good quality wheat values remain firm following the widespread downgrading of the NSW harvest. Strong export demand for milling quality wheat is also offering underlying support for prices.
Dry weather allowed for big advances in grain harvesting across all states. GrainCorp reported close to 2 million tonnes of grain deliveries across NSW and Victoria, in the week to December 13.
Queensland's winter harvest is now mostly complete, with final receivals trickling in from the Goondiwindi region. Grain harvesting is still progressing in northern and southern NSW following earlier rain delays.
Western Australia and SA bulk handlers also reported near record large weekly grain deliveries.
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