NSW sorghum prices continued to firm to about $330 a tonnes delivered Newcastle port last week as exporters chase supplies.
Many had thought that Australian sorghum was unlikely to captures much export demand with values significantly higher than US supplies.
Although speculation is building, Australian sorghum is still finding Chinese export demand at these levels because of the China’s anti-dumping inquiry into US sorghum.
This view gathered some momentum last week.
Traders reported that a vessel listed to ship chickpeas from the Newcastle port was switched to sorghum last week, with talk of another vessel to follow.
Bigger increases were witnessed in Central Queensland sorghum values where port bids climbed by $10/t to $310/t, a sign that exporters are chasing supplies.
Central Queensland sorghum prices have now rallied by $60/t in the past eight weeks from $250/t port at the start of February.
Darling Downs sorghum was $4/t higher at $316/t delivered while Brisbane bids were $2/t higher at $328/t.
Feedlot operators are reducing cattle numbers as the prolonged higher grain values takes a toll on operating margins.
Drought induced high grain prices and historically high cattle prices is forcing feedlot operators to slash cattle numbers.
The Australian Lot Feeders Association reported a 13 per cent decline in Queensland cattle on feed numbers in December quarter industry survey and further reductions are anticipated when the March data is released.
Sandalwood Feedlot, in the heart of the Darling Downs, last week reported they had reduced cattle numbers to a third of capacity, citing the difficult trading conditions.
A softening in cattle prices last week may offer some modest improvement in the cattle feed lot margins.
The Eastern Young Cattle Indicator fell by three per cent to 544 cents a kilogram (carcase weight).
There appears to be no end in sight to the strength in the northern grain prices.
Unsettled weather brought some patchy rain to parts of NSW over the weekend on Monday.
Rainfall amounts were highly variable.
Parts of the Central West received some handy falls.
Dunedoo recorded 35 millimetres and Gilgandra 15mm.
Collarenebri in the North West received 17mm.
Farmers are becoming more anxious about the prolonged period without any significant rainfall.
Soil moisture levels are very low following the hot, dry summer and farmers are looking for soaking rains in the coming weeks in the lead up to winter crop plantings.
US grain markets were sold sharply lower last week on escalating trade worries as Trump signed off on his plan for a $60 bill of tariffs on Chinese goods.
The International Grains Council forecast that global wheat production will fall to a six year low of 741 million tonnes in the 2018-19 season from 758 million last year.
IGC said the largest reduction will be in Russia where wheat production is projected to decline by more than 10 million tonnes to 74.5 million tonnes.
A lot can still change in the Black Sea wheat production forecasts were winter crops are just coming out of dormancy.
