Buyers source grain as stocks run out

17 May, 2018 04:00 AM
 Nathan Cattle, Clear Grain Exchange, said buyers were flocking to the exchange to source grain.
Nathan Cattle, Clear Grain Exchange, said buyers were flocking to the exchange to source grain.

WITH readily available parcels of grain becoming increasingly scarce buyers are flocking to Clear Grain Exchange to source grain.

The demand for grain, both from domestic end-users and the export market, where Australian grain is competitively priced, is strong meaning buyers continue to look to accumulate grain in spite of rising prices.

Clear Grain Exchange managing director Nathan Cattle said 44,000 tonnes was traded on the exchange last week over a range of port zones, with 34 buyers purchasing and more looking for grain but not finding what they wanted.

He said farmers were achieving strong prices of up to $10 a tonne over publicly-advertised bids, which were already at inter-year highs in many cases, indicating buyer demand is relatively strong for grain on offer.

“The exchange is performing a function in linking up buyers and sellers, allowing the sellers access to a deeper pool of buyers and giving the buyers more access to grain,” Mr Cattle said.

He said farmer selling strategies varied.

“Some guys are seeing the price and thinking that it is solid and are deciding to sell, while others are maintaining a drought hedge by holding grain,” Mr Cattle said.

“There is the feeling many domestic users will need to buy more grain before new crop comes online and stocks are becoming harder to source.

“While it is still early and we are hopeful of rain, as the break gets later it starts to eat into prospects for the new crop.”

Mr Cattle said for the lucky few growers in areas such as eastern South Australia, southern WA and western Victoria who had sufficient sales last year to have tax considerations to think about, there may be the inclination to hold grain until the new financial year.

“Cropping has started so they have likely got the funds needed for cash flow and now it is about maximising returns on the remaining grain,” he said.

In terms of commodity by commodity sales, Mr Cattle said it was mostly wheat that was moving on the exchange.

“Barley stocks are being run down, and if there are unsold parcels of grain in many cases it is mixed farmers holding them as a drought hedge in case they need to continue their feeding program through winter given the lack of moisture to generate autumn feed,” he said.



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