Domestic grain markets across eastern Australia remain soft with buyers showing little interest in further nearby purchases, with their sights set on cheaper new crop supplies in the spring.
Southern Queensland SFW bids now tumbled by close to $100 a tonne from the highs of $500 in late May. At the time buyers were struggling nightmare logistics, high global prices as well as Australian wheat and barley being among the cheapest feed grains in the world.
Nothing lasts forever.
Both the domestic and global circumstances have changed considerably in the past 10 weeks. This has resulted in a sharp downturn in local wheat and feed grain prices, although not to the same extent as the blood bath seen in the United States wheat futures.
Persistent rain in NSW and southern Queensland has ceased which has allowed growers to access on farm supplies. Many feedlots were sailing close to the wind on supplies, with just getting by on hand-to-month supplies. Improved logistics and increased farmer selling means these same feedlots are more comfortably covered through to September.
Global market dynamics have also turned. US wheat futures have plunged by around 30 per cent. The selloff continued last week as traders removed war premiums on the improved chances of Russia signing an agreement that will allow deep sea bulk grain exports from Ukraine.
The United Nations said it was hopeful an agreement would be signed as early as this week but flagged there was a long way to go before there would be peace talks to end the war.
Export demand for Australian feed grains from Asian buyers has also slowed as cheaper South American corn becomes readily available in the region. Traders are saying Asian buying ideas have slumped in recent weeks as buyers take advantage of cheaper Brazilian corn.
Local markets have steadied in the past couple of weeks as the farmer selling slows and buyers must work harder if they want to secure supplies. Darling Downs SFW is back to around $410 delivered, reflecting an 18pc decline.
Production outlooks remain favourable with farmers eying off another big winter crop harvest. Larger wheat plantings in the state's south west and forecasts for a wet spring, all augur well for farmer returns in 2022.
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