Australia: Feed grain prices drop as harvest continues
Feed grain prices have dropped between A$15 and A$40 in recent weeks in Australia and there are several factors at play, according to an industry expert.
Rabobank senior oilseeds and grains analyst Cheryl Kalisch-Gordon said recent rain across grain-growing regions was one part of the recent reduction in grain prices, The Weekly Times reported on November 20.
“We have had a big softening on feed grain demand due to some localised rainfalls,” Dr Kalisch-Gordon said.
“They aren’t by any stretch drought-breaking, but they will be taking the pressure off the feed grain complex.
“What it has also done, given some of the rainfalls up north, is given some prospect of sorghum and generally summer crops.
“It’s early days, but the fact that some will be planted does take a bit of pressure off that feed grain requirement.”
On Monday, November 19, Feed 1 barley delivered to Melbourne fetched A$384 a tonne, down from A$427 a tonne last month.
Wheat has also dropped, with H2 wheat delivered to Melbourne at A$435 a tonne this week, down on A$450 a tonne last month.
Dr Kalisch-Gordon said the wheat price was being pulled down by recent rain, traditional harvest softening, global wheat prices dropping and the strength of the Australian dollar.
“In the context of harvest softening, we’re going to see that kept in check by the low expectations for new crop supply and the stocks on demand,” she said.
Dr Kalisch-Gordon said the amount of summer crop that could be planted and will subsequently be available won’t be enough to drag feed prices down, “but you are seeing stock respond to the prospect”.
“What’s fair to say is having relatively more (malt) barley compared to feed barley in a feed-driven market means a lower premium for malting barley,” she said.
iGrain general manager of strategy and development Duncan Whittle said recent movement in prices was a reflection of growers selling at current values. “Like in any market, for it to lift more you need to buy more,” Mr Whittle said.
“Growers are happy to cash in at these values. It may go up next year.
“It’s not unusual to see harvest-selling pressure. But it’s had a bigger effect this year because we’ve run so far, and so hard.”
As harvest continues across the country Mr Whittle said the quality of grain being harvested is surprisingly good, “for those able to harvest”.
20 November, 2018
