Wednesday, February 15, 2012

Price's steady while NSW sorghum harvest trickles in

Growers who got back from school holidays over the last couple of weeks, will have noticed not much has changed price wise. Domestic prices seem content with their current phase of price stagnation, with wheat prices stuck within a tight trading range over the last couple of months. APW on the east coast has averaged $205 in February; this is the same as Dec/Jan. Growers who took a punt on feed grade, this gamble would have paid off with the FED discount at -$50 in early December, and this is now at -$15. Feed barley is well above harvest averages, but in February has started to dip lower. Growers are either cashing out remaining tonnage, or settling in for the long haul targeting sales over the next couple of months on potential hiccups on Northern Hemisphere production.


ABARES has increased the domestic wheat crop to 29.5mmt (+1.2mmt from Dec report), however some question marks still hinge on the accuracy of the NSW estimate. Nonetheless this will still place further pressure on world ending stocks, and logistics in trying to ship as much as possible before next harvest. Wheat exports were also increased to 22.3mmt (+4.71mmt from 10/11). Exports will need to average 1.85mmt per month, with only Jan exports eclipsing this figure, four months into the marketing year. Actually the Jan wheat export figure of 2.05mmt is the largest in eleven years. The lion’s share of this was from WA, where 890kt of wheat was shipped. And with WA groaning under the biggest wheat crop in history, a strong emphasis will be placed on a busy export program before next harvest.

The extreme wet weather in QLD/Sth NSW of the last couple of weeks has dissipated, with the hot weather allowing sorghum harvest pace to pick up. Although stormy activity remains around the Downs, delaying harvest in some isolated regions. Southern QLD harvest has provided very good yields and SOR1 quality, although grain size is smaller. Grower selling remains low with track prices at their lowest levels since mid Dec and $12 from the January high. No signs of end users and trade shorts yet, with delivered prices reaming steady.

Track sorghum has held a tight range all week but mostly just below $190 for Brisbane with a $5 discount to CQ ports. In delivered markets, Brisbane metropolitan region wasn't able to hold onto $200 delivered, and was down $1. Delivered Downs, also decreased $4 ($174 AWB) as buyers look for spread deliveries and no prompt destinations.

Moree region is yet to access flood damage with harvesting likely to pick up during the week and disclose the full extend of quality damage, and top of yield and area losses. ABARES have decreased their NSW sorghum crop size by 19% (668kt) compared to last year mainly by less area being planted to around 185,000 ha. However higher yields overall will compensate for flooded area and reduced yields around Moree. Some growers have started to tentatively deliver the odd load into Northern NSW sites with early quality very poor.

Newcastle track sorghum has held a tight bid range all week, with Toepher paying the better money at $189 port. Buying interest resurfaced into Newcastle as supplementary for rail deliveries for a late February shipment. While the next shipment is for a Toepher vessel (30kt) in March, which could explain Toepher offering the best track prices trying to snuff out as much tonnage as possible.



No comments: