Record surge in grain supply

And it won’t be forgotten. By volume, it was the state’s largest winter grain crop ever at 13.8 million tonnes, according to ABARES. 

The size of the crop presented plenty of logistical challenges for farmers and grain handlers at peak times. 

Trucks were scarce, and there were some longer than normal waits at some of the major delivery points, but for the most part it went relatively smoothly.

Grain quality was partially compromised with the record large yields with ASW seen as the major wheat grade. There were pockets of higher protein wheat produced through NSW, with good volumes of hard and some prime hard wheat in the north, but overall volumes were down on normal.

This scarcity of higher protein wheat is supporting Hard 2 prices, where buyers are being forced to draw supplies from greater distances than normal.

With the exception of some limited harvest logistical sales, farmers have been content in waiting for the harvest dust to settle before advancing their marketing program.

Northern and central NSW farmers had already sold the bulk of their chickpea crops prior to harvest, leaving them to focus on delivering against these contracts the grain was harvested. 

Chickpea prices of $850 to over $1000 a tonne delivered to packers have provided good cash flow to farmers to cover most of the short term needs.

Southern farmers tended to sell their canola and some cereals off the header, but are also happy to hold the bulk of their crop in warehouse or on farmer storage in hope of better prices.

GrainCorp has received 11.9 million tonnes of grain into its storage network through eastern Australia. 

This represents more than a 50 per cent lift over last year’s deliveries and is the largest since 2010-11.

NSW grain deliveries continued to trickle into the bulk handling system through the Christmas and new year period. 

GrainCorp reported grain deliveries of around 700,000 tonnes through this period, taking total grain receivals to around 6.6 million tonnes. 

Australia’s ASX wheat futures have traded in a $210/t to $230/t for the Australian Premium White (APW) quality through the harvest window. 

A significant proportion of the Australian crop is expected to be Australian Standard White (ASW) quality because of the soft finish. 

ASW cash market quality have been reflecting a $15/t to $20/t discount to APW.

Farmers have remained reluctant sellers at the current low prices. Farmers were content in trucking grain into the local storage or securing in on farm storage while waiting for the new year to assess the best marketing options for the massive crop.

Slow farmer selling has  allowed prices to creep higher in the past week as exporters gradually lift buying ideas.

Eastern Australian wheat prices now seen as competitive into Asian and some Middle Eastern markets for the first time for a few years. 

Shipping stems for Newcastle, Port Kembla and Geelong are now reflecting this increased activity for January and February.