Cereal market holds up but canola back

Cereal market holds up but canola back


Agribusiness
Harvest in southern regions is still in full swing but prices for high quality grades have not fallen significantly as happens most years.

Harvest in southern regions is still in full swing but prices for high quality grades have not fallen significantly as happens most years.

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IN SPITE of strong deliveries of higher quality wheat and malt barley in the past week as harvest hits full swing in the southern regions producing the majority of the grain this year values for both commodities have only come back slightly.

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IN SPITE of strong deliveries of higher quality wheat and malt barley in the past week as harvest hits full swing in the southern regions producing the majority of the grain this year values for both commodities have only come back slightly.

The prices on offer for premium cereal products such as malt barley and H1 hard wheat are still at levels attractive enough to have growers selling in spite of modest falls.

“There was a bit of a fall in the protein market at the start of December when the weather event through south-eastern Australia was not as severe as first thought, but since then values have held relatively steady,” said Nick Crundall, Market Check domestic markets and pools manager.

Mr Crundall said with prices significantly better than at this time last year many farmers were taking the opportunity the opportunity to sell grain.

“You can get prices of around $300 a tonne for H1 quality wheat and $290/t for H2 and farmers are seeing that as good value, especially where they have good yields in southern regions.”

Lachie Stevens, Lachstock Consulting managing director, said malt barley prices were also relatively strong.

Mr Crundall said the prices were gently declining, indicating growers were selling.

“Many are saying there is not a lot of grower selling as yet, but the price is steadily coming back and that suggests there are some sales.”

Mr Crundall said the drop in cereal prices was markedly less significant than can sometimes be seen over the harvest period where grower selling leads to a price slump.

He said the selling pattern was typical of the past few years.

“People appear to be holding the feed quality / lower quality milling grain and selling the protein or malt barley,” he said.

Mr Stevens agreed.

“People are selling malt and holding feed lines.”

Mr Crundall said there were pockets with significant amount of off-specification wheat.

He said AH 9, a high protein, high screenings and low test weight segregation opened up, was proving popular with buyers.

“You can get the protein at a price on par with ASW and it is a good wheat to blend,” he said.

The news has not been so rosy for canola producers with unsold product, with prices coming back between $30-40/t in the past three weeks to sit at around $500/t port.

Mr Crundall said the falls were in line with what was happening internationally.

“We’ve seen (French futures exchange) come back by around the same amount over the same time.”

Mr Stevens said most farmers had sold for cash when the prices were in excess of $500/t delivered site ($530-540/t port) but now some farmers were warehousing the product.

Nandaly, Victoria, farmer Terry Kiley said there was a wide range of wheat to market.

“We have got everything from AGP (general purpose wheat) right up to H1 (hard wheat), it just depends on the paddock.”

He said many farmers were assessing what quality profile they had in terms of stocks before selling.

“Most people have sold a bit but the majority is still warehoused as we have a look at it all in terms of what grades we have and what the market is doing.”

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