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THE grain market is dipping after riding a low Australian dollar into 2016 with commodity brokers saying tough weather conditions overseas are growers’ main chance of a winter price spike.
AgFarm national product manager, Chris Nikolaou, said prices could continue to drop in coming months.
Useful rain in the past two weeks in eastern Australia - particularly parts of Central Queensland - could add to future crop tonnages available for sale.
“When you’re talking cropping, it’s always weather driven,” Mr Nikolaou said.
He tipped offshore events could be critical for the coming season’s returns.
“If we see a price spike in the next four or five months it’ll be driven more so from overseas, more than here – particularly if this El Nino event starts fading,” he said.
“You’ll see consistent Australian market demand.
“But in the past three years Black Sea exports have bitten into a little bit of our (export) market demand and the situation is compounded by lower ocean freight rates.
“Areas that were traditionally freight advantaged, such as southern Asia, have had their marketing advantage to us reduced a little bit.”
Back home Moree trader, Guy Roberts, expected to see a fair bit of grain from the recent harvest held through to June due to the quality and quantity of crops stripped.
“From Narrabri to Goondiwindi along the Newell were some of the best barley and wheat crops they’ve ever had,” Mr Roberts said.
He said growers could afford to be a little optimistic, but shouldn’t expect much price movement unless there was extreme weather.
“Around $300 a tonne certainly is a magic figure, but I think that’s currently out of the question,” he said.
“We’re probably only looking at that if we start having trouble planting the next winter crop,” he said.
He also pointed to current sorghum growing conditions and weaker feedlot demand as potential price determinants.
“The summer crop is not huge at this stage, but there is a bit of sorghum in the ground,” he said.
“If we get a bit of rain the sorghum crop will hold barley and wheat prices back a little longer.
“I feel from Narrabri north, once we get into the second half of the year, we’ll see a need for barley and wheat for feedlots in Queensland.
“However, I sell a lot of barley to the same feedlots year after year and at present the lot feeders say they may not need as much because they’ve got grain around them.
“So, it really is in the lap of the gods.”