Year ends on high with strong demand for bumper crops

Harvest may be over for many, but buyers still need grain. See how bids are shaping up for barley and canola that are stored on farm.

IT may be the holiday period and following one of the biggest grain harvests on record, but the market for most commodities finishes the year with buyers showing plenty of interest at current prices.

Generally, growers are not pushed to sell too much at present as they have sold what they need to for cashflow purposes and are happy to reconsider markets next year.

However, the large crop size and equally large sales campaign has necessitated a substantial and consistent flow of grain to feed the hungry shipping programs.

Exporters with hedged sales and those with unsold stocks will be benefiting from the uptick in international futures prices. This trend is strong with corn futures in Chicago up $28 a tonne and soyabean futures up $98 a tonne since the start of November.

Chinese demand has been underpinning this demand and prices are also fuelled by dry weather in Argentina and Brazil affecting the recently planted summer crops.

Brokers quote BAR1 grade barley for prompt delivery to end users in Melbourne at $244 a tonne.

For those growers who don’t have access to trucks to haul grain to this market, exporters are bidding $221 a tonne delivered to Geelong or $224 delivered to Portland less freight to local silos.

Growers with trucks and grain stored on farm are attracted to the direct port prices. For January and February delivery shippers are bidding $229 a tonne to Geelong and $239 a tonne to Portland for BAR1 barley and $612 a tonne for canola to Geelong.

With the harvest over, labour is more available to commit to this task and further efficiencies are on offer with fertiliser back loads available from Geelong and Portland.

Rain on the later maturing regions in the Western District has some traders questioning the quality of the grain about to be harvested. Hamilton and Westmere have both recorded 28mm so far this month.

Apart from a small coastal region in the southwest corner of Victoria, in the month to date rainfall in the Western District is less than the December average but another 15 to 25mm is forecast this weekend. Traders will be looking carefully for signs of rain impact.

Buyers will be comfortable in purchasing wheat that is well clear of the 300 second standard but may be reluctant to accumulate inventory that is only marginally over the cut-off.

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