Wheat cash markets firmer

Domestic wheat cash markets firm


Cropping
Shoalhaven Starches will process a consignment of high protein Canadian wheat. Photo: Manildra Group

Shoalhaven Starches will process a consignment of high protein Canadian wheat. Photo: Manildra Group

Aa

AWB's Matt Wallis writes about what's happening in the domestic and international grain markets.

Aa

After some busy weeks of burning diesel in the paddock, this year's autumn sowing program is now approaching the finishing line, bringing with it a bit more optimism.

By the end of the week, the NSW cropping belt should be at least 85 to 90 per cent sown.

Unfortunately the remaining central and northern NSW areas are running out of time for a rain event to ensure planting within the optimum window.

Canola has been the biggest casualty of the dryer start, with year on year estimates of about 65 per cent reduction in area planted.

Due to the current soil moisture deficit, this number is expected to be much higher west of the Newell Highway.

Wheat and barley have been sown at the expense of canola with the expectation that each commodity could be up by as much as 40 per cent year-on-year.

Earlier sown crops are germinating well across southern NSW where the rain has fallen, in some cases allowing livestock to get a first look at established grazing wheats.

The opposite could be said of the north, where below average conditions have continued and a much-needed rain event is required for germination and establishment of winter crops.

Domestic wheat cash markets have halted their recent decline and gained $5 to $10 week-on-week, thanks mainly to favourable overseas movements.

Special Feed Wheat (SFW1) into the Griffith market zone is trading up to $350 a tonne delivered in May. While 18/19 Australian Premium White (APW) is up $5 on last week at $365 in the Port Kembla zone.

Premiums are now starting to be realised for barley stored on-farm, with recent parcels trading up to $10 to $20 above wheat.

Global futures markets have sprung to life over the previous week due to drenching rains of 2 to 6 inches falling across the US mid-west, which has caused concern for the spring crop planting.

The nearby CBOT Soft Red Winter (SRW) wheat contract has exploded by 42 US cents a bushel, while the December contact has gained 38 US cents a bushel on last week. Their respective swaps are up AUD $26 and $23 to $249 a tonne and $257 a tonne.

With new crop basis currently quoted near $70 at Port Kembla, site prices for 2019/20 grain at $300 a tonne are becoming achievable once again.

Canola markets have been reasonably steady of late. At current prices they still offer relative value to historical averages, with Newcastle and Port Kembla track markets both bidding at $605, while the Newcastle crush was priced at $615 for May delivery.

It's been more than 10 years since Australia last imported cereal grains. Late last week, the Department of Agriculture and Water Resources approved a bulk import permit for a 57,000 tonne consignment of high protein wheat.

The wheat is of Canadian origin and is due to arrive at Port Kembla within six to eight weeks, before being exclusively processed under strict biosecurity conditions at Shoalhaven Starches in Nowra.

The flour miller stated that "inland NSW flour mills at Manildra, Gunnedah and Narrandera will continue to be solely supplied with only local, Australian wheats".

Aa

From the front page

Sponsored by