Local Market Update

  • New season crops are performing well as we come into spring.
  • Grain movement is very slow.
  • Dairy farms continue to maintain higher than average pasture covers on the platform.
  • Feed contract pricing for 2021 is looking slightly behind the current year.
  • PKE price is currently sitting around $300/t.
  • There is limited demand from processors.
  • Be sure to monitor stored grain for pests and Insects.

Ruralco are always looking for grain to supply a wide range of end users. Drop in your sample at any Ruralco Store, or call the Ruralco Customer Service Centre on 0800 787 256 to arrange sample bags or pick up. For queries about free or uncontracted grain that you would like to sell please contact the Ruralco Seed Team, or request a call back below.


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Canterbury Growers Pricing Per Tonne*

 

Export Pricing Per Tonne*


*Pricing at 01 September 2020.


 

Meet Our Experts

Craig Rodgers

GROUP MANAGER ON FARM SALES

@: Craig.Rodgers@ruralco.co.nz
Ph: 027 495 2029

 

John Scott

GRAIN & SEED CO-ORDINATOR

@: John.Scott@ruralco.co.nz
Ph: 027 227 7048

 

Jack Dudley

GRAIN & SEED CO-ORDINATOR

@: Jack.dudley@ruralco.co.nz
Ph: 027 238 9014

 

Australian Update

Feedgrain Focus: Values steady as southern inverses shrink

Demand in southern markets for new-crop export business has closed the inverse on barley and narrowed it for wheat, while in the north, new-crop values have firmed on limited selling.

Nearby wheat markets have softened as consumers limit their buying ahead of expected price pressure likely to hit the market by October when the New South Wales harvest gets going in earnest.

The most aggressive grower selling into nearby slots is coming from southern NSW, where stocks retained or bought for supplementary feeding of livestock are now surplus to requirements amid mostly excellent pasture conditions.

A few early crops of barley on the Western Downs of Queensland and in far northern NSW are now being harvested, and the wheat harvest is about to kick off in central Queensland, with tonnage from both expected to disappear quietly into local markets.

Export bookings increase

Trade sources report bulk new-crop wheat sales have been booked to China, Indonesia, The Philippines and Vietnam, and new-crop barley is pricing into the Middle East and Thailand.

“The barley inverse has gone, we’re at export parity and we’re booking export business,” one trader said.

Consumers in Victoria and southern NSW are buying small amounts of nearby barley, but appear to be waiting for prices to drop a few dollars to advance new-crop buying.

“New-crop has been pretty quiet for the consumers.”

Southern growers appear to be in no rush to sell new-crop barley, and are likely to sell their canola and milling wheat at harvest and store their barley if bids for it fail to firm.

Riordan Grains general manager Mark Lewis said rain in the past month had boosted new-crop prospects and encouraged growers to sell their current-crop stocks.

“August rain has been fantastic for crops in the eastern states.

“It’s put us in the box seat in terms of production.

“The current-crop market is coming back, and growers are letting go at these levels.

“In new-crop, we’re finding a little bit of demand…from export and domestic buyers, and there’s enough happening to soak up what the grower is wanting to let go of.”

Northern carry-out extends

Small-to-medium feedlots are going into the harvest slot with more grain stored or pre-bought than was expected a couple of months ago.

They are responding to excellent grazing conditions from the Queensland-NSW border through to south-eastern South Australia, which has throttled the number of cattle coming into yards as restockers buy up big.

“I’d say the feedlots would be down 50 per cent on their capacity because cattle are just so expensive,” one trader said.

“In the nearby market, feedlots are buying 100 tonnes here and 500t there, but really, they’re waiting for cattle to get cheaper and for beef prices to get higher.”

This does not appear likely to happen any time soon.

“The feedback we’re getting is that all processors want to drop their grid prices, and cattle booked into meatworks are being pushed back.”

New-crop barley will start to flow into Downs feedlots in reasonable volume by mid-September, weather permitting, and most feedlots are expected to stick with barley until harvest pressure narrows the spread between barley and wheat to less than $40/t.

“There’ll be plenty of barley around once harvest gets going to take us into next year.”

Carpendale Commodities Andrew Jurgs said new-crop values for wheat and barley had steadied in the Downs market, where the inverse was collapsing.

“The market is in an interesting position as we look for growers to start harvesting, and consumers onshore and offshore to start buying more.”

Grower selling mixed

Delta Agribusiness general manager grain division Mick Parry said growers in the southern third of NSW were engaging in new-crop sales, with export demand supportive of values.

“Growers in north-west and central-west NSW were chirpy sellers through June-July, but the lower prices they’ve seen in August have slowed selling down.”

In southern NSW, the inverse between current-crop and new-crop barley has shrunk to about $25/t, and will get smaller as harvest approaches.

“It’s difficult to find homes for old-crop stocks where growers bought grain for feeding and now don’t need it.”

Basis, or the premium of Australian grain over Chicago wheat futures, is at an historically low level of around $5/t at the NSW bulk export points of Newcastle and Port Kembla, compared with close to $200/t at the height of the domestic drought market in 2018.

“Basis has gotten cheap. Australian is at harvest levels already. We’re priced very well into export markets,” Mr Parry said.

China is said to be buying Ukrainian barley for shipment over coming months at a premium to Australian barley, which is looking all the more attractive into other destinations by comparison.

Feed Wheat Comparison

Feed Barley Comparison

World Update

HIGHLIGHTS

At a record 2,230 million tonnes (2,181m year before), the forecast for world total grains (wheat and coarse grains) production in 2020/21 is up by 6m m/m (month-on-month), including upward revisions for wheat, maize, sorghum and rye. Larger feed use figures for maize and sorghum are mainly behind a 4m t upgrade for projected total consumption, to 2,222m (2,181m). The forecast for global grains stocks at the end of 2020/21 is boosted by 5m t m/m (mainly wheat), to 630m, an accumulation of 8m y/y (year-on-year). Adjustments for wheat, maize and sorghum lift the world trade (Jul/Jun) forecast by 4m t m/m, to 395m, an increase of 1% y/y.

Tied to continued heavy shipments from South America, chiefly Brazil, the Council’s forecast for global soyabean trade in 2019/20 is lifted to a peak of 163m t, the 7% y/y gain primarily stemming from bigger dispatches to China. Largely on an upgraded outlook for the US, world production in 2020/21 is projected 8m t higher m/m, at a record of 373m, up by 10% y/y. The m/m increase in total supplies results in an upward revision to consumption, seen climbing to a new high, and stocks. Trade is predicted 3m t higher than before, at a peak of 164m, a marginal y/y advance.

Reflecting a slow pace of shipments, mainly by Thai exporters, the forecast for world rice trade in 2020 is cut by 0.7m t, to a multi-year low of 42m (43m), the third successive y/y decline. Production in 2020/21 is projected to rebound by 2% y/y, to a peak of 505m t, on bigger crops in leading exporters. Carryovers are trimmed from before, to 181m t (177m), albeit still a new high, including gains in key exporters. Trade in 2021 is predicted unchanged m/m, at 45m t, a 6% y/y gain.

The IGC Grains and Oilseeds Index (GOI) increased by 3% m/m, to the highest in nearly two years.

OVERVIEW

The biggest maize harvest in history is largely behind a projected 50m t jump in world total grains (wheat and coarse grains) production in 2020/21, to 2,230m. The world wheat crop is also expected to be a new high, while above-average outturns are predicted for barley, sorghum, oats and rye. Total consumption is seen climbing by 41m t y/y, to 2,222m, led by gains for feed (+18m y/y) and industrial uses (+12m). Amid record supplies, maize demand is seen rising the most, up by 33m t y/y. An 8m t expansion of total grains stocks is foreseen at the end of 2020/21, to 630m t, including accumulations of wheat (+14m) and barley (+3m), but the fourth consecutive contraction of maize inventories (-12m). Trade (Jul/Jun) is seen climbing by 1% y/y, to 395m t, with increased shipments of maize and sorghum, but smaller volumes of wheat and barley.

Tied to significant growth in China’s soyabean arrivals, world import demand in 2019/20 is seen rising by 11m t y/y, to a record of 163m, with most of the increase absorbed by Brazilian exporters. Based on a rebound in US production, together with potentially bigger outturns in the southern hemisphere, global output in 2020/21 is predicted to advance by 10% y/y, to a peak of 373m t. Underpinned by recovering feed sector demand in China, together with expected gains elsewhere amid improving economic conditions, world uptake is projected to rise by 4% y/y. Inventories are also seen expanding, but remaining short of the 2018/19 peak. Growth in global trade could moderate but, at 164m t, would be a new high, with US exports projected to rebound strongly.

Amid weak demand from sub-Saharan Africa, high international prices and a historically slow pace of shipments by Thailand, world rice trade in 2020 is forecast to contract for the third successive season, to a multi-year low of 42m t. Consumption in 2019/20 is anticipated to expand on population growth, and as quarantine and food-security measures underpin uptake in Asia, while inventories may increase on accumulation in India. Reflecting acreage gains in Asia, global output in 2020/21 is predicted to rise by 2% y/y, to a record of 505m t, with consumption and stocks also seen reaching new highs. Trade could expand by 6% y/y in 2021 on firmer demand from importers in Africa, but staying below past peaks.

MARKET SUMMARY

With advances across all sub components, the IGC GOI gained by 3% m/m, to its highest since October 2018.

Increases in US and EU fob values, linked partly to crop concerns and talk of fresh Chinese buying interest, contributed to a 1% m/m rise in the IGC GOI wheat sub-Index.

The IGC GOI maize sub-Index touched a six-month peak, up by 5% from the last GMR. Quotations in South America moved higher on busy exports, while the US market was underpinned by worries about adverse weather.

Amid rain-related harvest delays in Thailand and robust domestic demand in Vietnam, the IGC GOI rice sub-Index gained by 3% m/m.

The IGC GOI soyabeans sub-Index rose by 4% m/m. While values were firmer at all key origins, advances in South America were especially pronounced, partly reflecting currency movements.

 


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