Market Update Wednesday, 16th January 2019

January 16, 2019 4:00 am Published by Leave your thoughts

Wheat

Domestic
Markets have been slow to kick back into gear since the new year.  The domestic feed consumer across most of the east coast it seems, has locked in cover out until the key sorghum harvest period of March.  The vast majority of trade flow for the upcountry user is now coming from the port and a premium remains in the market for upcountry destinations. Ex-farm values whilst thin on volume will find buying interest at a premium to Port values as buyers seek to pick up any parcels closer to the consumer.  In our view, the northern grower remains relatively unsold holding off on marketing decisions on what limited grain there is.  As sorghum harvest approaches, end users have the opportunity to reduce wheat utilisation in their ration and substitute to cheaper sorghum.  Whilst sorghum is currently at a historically high discount to wheat, we are still seeing limited non-traditional demand from the feedlotting sector.

International
Wheat futures markets have been relatively subdued in the new year.  With the US government in shut down, we are yet to see the latest USDA crop production estimates which the trade will seek to take direction from.  We wait with baited breath also for fresh intel on the US, China trade talks and any resolution. This may see China seek to purchase some US origin wheat or corn which would be a bullish story for futures.  Finally, we are hearing reports that Russian government officials are beginning to exert pressure on some wheat exporters in a bid to slow down the export pace and maintain enough supply for domestic consumers.  Whilst this is yet to spill over onto US futures markets, Russian export values are reportedly rallying.

 

Sorghum

As the heat takes hold here in Northern NSW and Southern QLD, sorghum markets have reacted accordingly.  The Newcastle track market continues to rally against Brisbane track and is now at a $20+ premium.  Sorghum delivered into the SQLD upcountry stockfeed homes continues to work at a $90-$100 per tonne discount to wheat.  Harvesters have begun on early crops up around the QLD border and south toward Moree and Bellata.  We are seeing demand enquiry from consumers as far south as Griffith and the southern highlands as poultry producers seek a cheaper alternative to wheat.

 

Barley

Feed barley values continue to track wheat at approximately a $40 discount into northern feed markets.  At these levels, it is finding itself a significant chunk of the feed ration in the cattle market and we are also seeing an increase in demand from the poultry sector in Southern NSW and Vic.  Similar to wheat, barley in the northern half of the east coast is pricing itself into up country homes at the full cost of execution from the port.  The Australian barley industry continues to work through a collaborative response to China’s anti dumping enquiry to do everything possible to sustain that market as a consumer of Aussie origin barley going forward.

 

                                   

Warrah Ridge Sorghum, 1st January 2019                           Same Crop 15 Days later & out in head!

Please get in contact with us if you have any feedback or would like to dicsuss the market in more detail.

Regards,
Agracom Marketing Team

Categorised in:

This post was written by agracom

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>