Grain wrap: Rolling the dice on summer crop
Bridie George, AWB
With another week of significant widespread rainfall failing to eventuate in Northern NSW, summer crop is hanging in the balance and the next 4-6 weeks will be pivotal for planting decisions. While some sorghum is already out of the ground, it has been up against the elements , with a cocktail of cooler soil temperatures, hot winds and lack of moisture detrimental to plant establishment.
For those not willing to take the dry or shallow profile sowing risk, 4+ inches of rain seems to be the magic number required to fill dry fallow profiles and plant before Christmas. ABARES have the 18/19 sorghum crop pegged around the 5-year average mark in their forecasts, however failing adequate precipitation in that time frame, we could see this fall significantly.
If chasing a cash crop this summer, the question of cotton or sorghum is also an interesting one. With the new crop cotton price lingering between $600-$650 over the past few months, it’s an attractive option. However with Sorghum prices also north of $370/mt Newcastle Track, it poses less risk in terms of inputs and still has strong gross margin potential, especially if irrigating and water is tight. If mid-late January rolls around and conditions haven’t permitted cotton or sorghum to go in, we may then see decisions deviate to Mung Beans and Sunflowers in areas where they are able to be grown, which could keep the hope of a summer cash crop alive.
On the winter crop front, harvest moving south from Central Queensland will likely be held up following rainfall over the weekend, staggering the timeframe that the crop will hit the market. January 19 Eastern Australia Wheat traded a contract high of $450 in September, $40 stronger than the August contract high of $410, and feed barley traded a high of $447.50. Coupled with CBOT March 19 futures sitting around the $540 USc/Bu mark (at time of writing) and the weaker AUD, trends look positive. Feedlots continue their competitive moves to pull grain to cover a record number of cattle on feed and ex-farm and delivered harvest pricing presents opportunities for cash flow. On the flip-side, some trade selling from WA drove the price over there down circa ~$5 last week and the forecast rain across the eastern states this week could see some weakness come into the local market in the short term.
On the back of the buzz surrounding fodder, word of Australian crops being baled for hay continues to attract attention both locally and globally. However, for those who have not already made the call, the mathematics of baling may alter in light of significant rainfall received in western and central-western areas of the state last week, giving a kick to spring feed growth.
Originally published 9 October, 2018
For further information call the AWB Grower Service Centre - 1800 447 246
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