Feedlots welcome grain price reprieve

The contraction in prices came as no surprise, and signals an end to more than two years of $300/t plus spot feed grain prices for Darling Downs feedlots.

The drop has been eagerly awaited by feedlot operators after two years of drought that slashed local grain production and forced buyers to pay up to $100/t in freight and handling costs to secure supplies from as far afield as Western Australia.

Cooler than average temperatures, and the occasional light shower of rain, is what has slowed harvest progress.

Farmer selling has been limited to the modest volumes that are coming off the header.

Old crop wheat supplies are scarce, with Darling Downs paying up to $350/t for prompt supplies. This is about $50/t higher than new crop prices.

Wheat and barley crops in northern New South Wales are haying-off, with a general start to harvest still a week to 10 days away.

Exporters are gearing-up for big wheat exports from NSW in the coming months on the back of what is shaping-up as a record large winter crop harvest.

New crop wheat values were slightly firmer after US futures rocketed higher.

This followed a bullish quarterly stocks report from the US Department of Agriculture (USDA), coupled with continued dry weather in the Black Sea.

US wheat futures surged 5-7 per cent higher last week after the USDA reported smaller than expected wheat stocks at the start of September - as well as trimming its forecast for the 2020-21 crop harvest.

Although, most of the market concern remains focused on dry weather conditions in the Black Sea.

This is creating uncertainty about the size of next year's harvest.

The lack of rain in the Black Sea is causing concern about the germination and establishment of the winter wheat crop there heading into dormancy through the winter.

Russia's agricultural ministry has reported that more than 60pc of the winter wheat crop has been planted, although much of that is expected to have been dry sown.

Weather forecasts point to mostly dry conditions continuing throughout Russia for the next 10 days.

Local wheat prices ended last week steady to slightly higher with the rally in US futures, while barley values were steady to lower.

ASX east coast wheat was unchanged at $300/t and barley slipped $4/t to $232/t.