Transcontinental shipments in for the long haul

Transcontinental shipments in for the long haul


Grain
Grain ships will continue to move from WA to Queensland and NSW to meet domestic shortages.

Grain ships will continue to move from WA to Queensland and NSW to meet domestic shortages.

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Shipments of grain from Western Australia could continue to head to the east coast until the 2020 winter crop is online.

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GRAIN industry analysts have said it is possible grain will continue to move from Western Australia to Queensland and NSW virtually without a break right up until the 2020 new crop is online.

The east coast is staring down the barrel of another markedly below average season while solid rain right across Western Australia over the weekend has consolidated falls earlier in the month, boosting the prospect of sufficient supply to not only meet demand from long term export clients but the east coast domestic market..

A source within the Western Australian grains industry said the totals, ranging up to 100mm in some parts of the grain belt, were impressive on their own, but even more important was the distribution of the rainfall.

He said the best falls had occurred in low rainfall areas in a strip stretching down from the Geraldton zone to inland parts of the Esperance port zone.

Normally wetter parts close to the south-west corner did not receive as much, but are more likely to receive follow-up rain.

After looking desperately dry at the start of June, Western Australia is once again set up for a solid season.

The late break could even mean more feed grain is available for transcontinental shipments, as the WA source said he had heard of farmers dropping canola out of the rotation due to missing the optimum planting window for the crop, which does best when planted early.

"They will now look to plant barley or oats in those paddocks originally planned to be canola," he said.

Meanwhile, in Queensland, Andrew Jurgs, trading manager for Carpendale Commodities, said hope was running out for a meaningful winter crop through the Darling Downs and the south-west of the state.

"The planting window, especially in the south-west, could extend right through to early August, but we still need that moisture and there is no real sign of it as yet."

At present, he said the south of the state was only around 30 per cent planted, with much of that planting down to a desire to have the crop planted in case of late rain, rather than real confidence in the season.

Mr Jurgs said Central Queensland was faring better, but added the cropped area there was too small to satisfy all of the local domestic demand.

Even if there is some rain and some winter crop is produced he said it would be highly unlikely to satisfy local demand.

"People are planning on continuing to bring crop from Western Australia even as we switch over to the new crop, they are hoping the price will remain at a point where it is economic to bring it across."

Mr Jurgs said since the first shipments had started coming across in the second half of last year, the supply chain had become efficient.

"In terms of execution, bringing the grain from port back upcountry, it is all working quite well, people are very comfortable now purchasing Western Australian grain."

He said many major end users decided to continue to stick with imported grain rather than compete for the depleted volumes of sorghum on offer after this year's harvest.

"The sorghum has gone mainly into pigs and poultry, the others have by and large stuck with white grain."

Mr Jurgs said there had been a split of about 60pc barley and 40pc wheat, mainly ASW quality, that had come across from the west and that he expected, if pricing levels remained relatively similar, for that to continue to be the case.

The big potential obstacle will be if the world market continues to rise on the back of the concerns about US corn supplies, and that drags WA prices to levels too high to be affordable for east coast domestic users to bring grain across.

Given the Black Sea is on the cusp of another productive season, however, it is not anticipated this will be a major issue.

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