Exporters sweeten offers to meet demand for strong harvest

The holiday period may be quiet for domestic demand, but a hectic shipping program is under way. See what fresh pricing opportunities exporters are providing for growers this week.

Busy season: The grain industry is flat out rushing to fill ships for export.

THE winter crops lay dormant under snow in the northern hemisphere and domestic buyers have ample cover for their demand during the holiday break, but the grain industry is frantically busy shipping one of the country’s largest crops.

Cereal grains are supported by Russian export taxes and the emerging dry in Argentina.

ASX wheat futures are stronger this week, up $2.50 a tonne from last week.

An impressive feature of this market is the $15 carry cost that is paid for the May futures over the January contract.

This more than compensates for interest and storage costs of owning and storing grain for six months and is indicative of the ongoing export demand that has been created by the robust shipping program under way.

The grain harvest may have mostly finished, and the shipping season is well under way.

Exporters who may intend to book grain terminal berth for a 35,000 tonne vessel will need to wait until June in the Viterra system in South Australia, July in Portland, August in Newcastle and the end of September for Geelong.

This month alone, five vessels are to load around 250,000 tonnes of canola, wheat and barley in Geelong, four vessels will load 234,000 tonnes of wheat and canola from Port Kembla and four vessels will load 140,000 tonnes of bulk wheat and barley from the Port of Melbourne.

The busy ports program has meant a focus on getting grain in, to meet shipping schedules.

Our grain tables this week show the premium prices for wheat, barley and canola that are $6 to $10 a tonne higher than the port equivalent prices available at up-country sites.

Most growers have stored uncommitted grain in warehouse arrangements in the central storages.

Only growers who are still harvesting or have grain stored on farm can take advantage of these prices.

The remaining grain harvest is southwest Victoria has been delayed once more after summer rains swept through the area over the weekend. While isolated falls of more than 80mm were reported for the weekend, official recordings were 19mm in Hamilton and Ararat, 42mm in Ballarat and 52mm in Westmere.

Headers were prevented from harvesting last week with many grain moistures exceeding 14 per cent.

The cool conditions forecast this week will mean harvest is likely to be delayed until the weekend.

The rain may challenge wheat quality, given the heavy falls of mid-December.

Fortunately, many growers are planting winter wheats dedicated to the feed markets and price discounts for quality loss are not a major factor.

Many sites have posted exporter bids with $16 a tonne discounts for Australian General Purpose under Australian Premium White wheat prices.

But the direct port delivery prices are discounting AGP by only $7.

MORE

YEAR ENDS ON HIGH WITH STRONG DEMAND FOR BUMPER CROPS

PRICES CONTINUE TO CLIMB DESPITE FIRMER DOLLAR, BUMPER HARVEST

WHISPERS FROM RUSSIA FINALLY PUT A HALT TO WHEAT PRICE SLIDE