Queensland sweats on downgraded NSW grain

Queensland sweats on downgraded southern grain


Southern Queensland markets are likely to absorb downgraded feed grains after recent heavy rains across southern NSW.


Southern Queensland feed grain markets are likely to absorb downgraded feed grains after recent heavy rains across southern NSW. However, the extent of the downgrading is unclear and buyers are lining up to own the downgraded supplies following the poor northern winter crop harvest.

Darling Downs stockfeed wheat and feed barley lowers drifted lower last week as buyers wait for the downgraded grain to appear, but prices continue to hold the well-established ranges. Stockfeed wheat quotes fell by $4 to $320 delivered Downs markets while F1 feed barley lost $3 to $315. Stockfeed wheat is maintaining the $320 to $320 price range that’s been in place since the widespread October summer crop plantings rain, with barley holding a $5 to $7 discount to wheat.

New crop sorghum prices were little changed last week at $262 Darling Downs markets.

It’s likely to be some weeks until the extent of the downgrading from the recent rain on the southern grain crops becomes clearer, but demand for downgraded grain will be strong.

Last week, ABARES lowered its forecast of the Australian wheat crop to 20.3 million tonnes, down from last year’s bin-buster of 35.1 million tonnes. Queensland’s wheat crop was forecast at just 735,000 tonnes, which would be the smallest in 15 years, if realised.

NSW winter harvest was also devastated by the poor season. ABARES pegged the NSW wheat crop at 4.78mt, the smallest in a decade.

Many traders believe it’s likely to be well short of this. Graincorp said they had only received 1.6mt of grain deliveries in the first week of December, with most of the state’s harvest already finished.

Despite the sharply smaller winter grain supplies, domestic feed grain demand remains robust as seen by the near record numbers on cattle in feedlots. 

It comes as no surprise that buyers are lining up to secure ownership of any downgraded grain in southern NSW after the torrential rain in late November.

In the medium term, northern feed grain buyers are looking at the upcoming sorghum harvest to ease the supply deficit inflicted by the poor winter crop. ABARES is forecasting an Australian sorghum crop of 2mt, which would be the biggest crop in four seasons.

Recent rains have boosted summer crop prospects but farmers will be looking for more rain in early 2018, to finish these crops.

Global grain markets continue to struggle with abundant wheat supplies, and there is no sign of these easing.

Last week, the Canadian government crop forecaster raised its forecast of the 2017/18 wheat harvest to 30mt. This is 3mt above the USDA’s latest forecast. The bigger Canadian crop reinforces the view that competition for exports in the 17/18 season will remain fierce.

Asian buyers are maximising Black Sea wheat imports and limiting the intake of Australian wheat the higher protein grades for blending.  Australian wheat exporters are struggling to uncover routine Asian export demand considering the abundance of global supplies.  

The story Queensland sweats on downgraded NSW grain first appeared on Queensland Country Life.


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