Key Points
- Mixed quality seen from the Australian harvest due to seasonal conditions
- Domestic prices outstrip international values as a result of extremely dry conditions
International vs Domestic Market
The National Pool predominantly markets its receivals in the international marketplace. The global supply and demand situation is significantly tighter this season than last which has seen durum values increase in the international marketplace. These values are being reflected in the National Pool EPR’s. However values are still lower than what we are seeing domestically due to the extremely dry season experienced.
This is why the EPR’s for the Pool are not competitive with domestic prices and why we have chosen to focus this update on domestic issues rather than what is going on in the international marketplace.
Domestic Harvest - NSW
Havest is complete in NNSW with very mixed quality reported as a result of the drier season finished off with patchy storm activity at harvest. There have been issues with poor test weight and high screenings due to a tight finish. As a result, quality has predominantly been either DR1 or DR3. Yields have been down on expectations particularly around the Bellata district.
On the Liverpool Plains harvest is approximately 90% complete. Quality has been typical of a drought year with high protein and high screenings a feature. Again screenings levels are seeing durum fall into the DR3 bin. Tonnage produced is down approximately a third on last years figures. Average yields are around 2.5t/ha. There have also been some reports of crown rot in the area.
Given quality concerns, many growers have been reluctant to take advantage of forward marketing opportunities. Many growers are choosing to warehouse or hold their durum on farm. Prices have dropped away recently encouraging many growers to hold in the hope that levels seen previously will
return. Millers have been in and out of the market and prices have been fluctuating according to their buying patterns. Feed prices are starting to improve again as dry conditions prevail and sorghum is struggling. The sorghum crop on the Plains is only approximately 55% planted.
In terms of durum market demand there are two main categories: consumptive demand from millers and beyond this, demand from the feed market. Growers need to be aware that once the millers have met their demand needs which are limited; prices will revert to feed values.
SA
Harvest in SA is approximately 75% complete with high protein and screenings levels around the 5% level, tipping a reasonable proportion of the crop into the DR3 bin. Approximately 50 – 60% of the Yorke Peninsula crop has fallen into the DR1 category.
SA has seen a fall in planted area to durum this season with final production numbers being further reduced as a result of lower yields and paddocks being cut for hay. Production is anticipated as being a half to a third of last years levels.
Again growers here have been reluctant to make forward commitments due to uncertainty surrounding quality. Earlier forward commitments have been filled and the majority of growers are now taking cash prices with some durum being delivered to a domestic pool.
Bellaroi
The customer is now receiving their second shipment of Bellaroi and has commented that they don’t see major quality differences between the pure Bellaroi variety and DR1. As such they have indicated they are not prepared to pay a premium for pure variety Bellaroi going forward. We will continue to keep you updated re varietal differences between Bellaroi and other varieties going forward.
View September Durum Market Update
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