By Tyson Hosie - AWB
The new year has brought with it a renewed sense of engagement from growers looking to step up the movement of the significant stocks still held in on-farm storages. In a bid to capitalise on recent rallies and, in some cases, free up space for the incoming summer crop, grower selling enquiry over the past week has been solid.
There’s been plenty of positive macro-economic influences chiming in to help underpin values of late, with the rally in US corn futures the primary catalyst for the starched-up bidsheets.
Good US export sales data into China and growing concerns for the US Plains crop fuelled the market higher, with additional strength gleaned from neighbouring wheat on the confirmation of a Russian export tax starting in March and strong Australian Export figures for December 2020.
US and European oilseeds exchanges put their shoulder to the wheel too, running up on the news of Chinese purchases and fund short covering ahead of months end.
The firmer futures markets have helped to counter the increased grower engagement, with the increased activity not putting a dent in bids. Delivered options into the Brisbane and Newcastle market zones and upcountry packing facilities for wheat are as robust as ever, however firmer wheat continues to highlight to the consumer barleys’ relative good value, which remains the feed grain of choice at present. Consumers remain cautious, however, and will continue buying grain on a hand-to-mouth basis whilst livestock values remain strong.
Attention, for many, is now turning to sorghum, with some of the earlier crops having been stripped now for a couple of weeks, whilst others have only just pulled the hitch pin out of the planter.
The rally in US corn futures, the uncertainty surrounding the final size of the Australian crop, and growers looking to cover forward sales first before re-engaging the market has seen the bids rocket up $50-$60/mt over the past month, eclipsing those of milling grade wheat. Whether export demand will be enough to cover the crop remains to be seen, however at current levels, sorghum has some significant work to do to get back into the domestic feed ration should our export program be limited by continued political issues.
Weather of late has been supportive of the later-planted crop, with yield and quality expectations still sound. Pleasingly, the earliest harvest results has shown good test weights and low screenings, despite disappointing yields, steeling expectations that given recent rainfall and mild Summer temperatures, the middle to late crop should come home strong – here’s hoping we can get the ducks that are price, yield and demand to line up for us!