SA Market Wrap - March

By Collette Wheadon

The past two months have seen the ports a hive of activity and domestic consumers back in the market, with grain moving rapidly by road and rail into these customers and ports. The extra road freight requirement of South Australian ports combined with an above average grape harvest has meant that road freight quickly disappeared, leading to delays in deliveries for both the trade and growers. 

Road freight isn’t the only logistical issue, flow-on from tight global ocean freight is also being felt across the country. This has meant the risk and costs to exporters increases as it becomes more difficult to find vessels to meet their delivery requirements. With these hurdles, we are also seeing ships lining up waiting at ports, and costs of demurrage increasing to approx. US$25,000 per day. The recent blockage of the Suez Canal has done nothing to help the situation, and the flow on effects globally are expected to be seen for weeks or possibly months. More than 425 vessels were held up with the blockage, including at least 60 dry bulk vessels carrying commodities such as grain, coal and iron ore.

These increased risks and costs to exports have had an effect on grain prices and as a result we have seen Port Adelaide wheat and barley  values fall $20/mt through March to currently sit around $285 port for APW and $228 for BAR1. These local freight hurdles have however created the opportunities for prompt premiums into delivered homes for those able to provide their own transport. This demand for on farm grain creating opportunistic rallies of up to $20- $30/mt for SFW, with bids up to $320- $330 delivered into the Adelaide zone. 

March has seen La Nina deliver its final blow throughout the East Coast, and while the results in some coastal areas were devastating, parts of inland New South Wales and Queensland also benefited with the Central West and Riverina now with near ideal subsoil moisture conditions. Locally, forecasts looked very promising suggesting 1-2 inches in parts,  but in what seems to be a common story, as the event closed in, it has all but disappeared and what eventuated was barely enough to settle the dust

As the calendar now flicks over to April, we are closing in on the start to seeding, locally the forecast isn’t offering anything too exciting. BOM is currently forecasting a dry start to April, and the systems for the latter half are showing bias to Northern Australia. With an average outlook for the next 3 months for most of South Australia and Victoria, we are going to need something to kick us off as we are starting from a near empty profile, after sitting in what feels like a rain shadow for much of 2021.