Dry weather hits sorghum production.
By James Massina
25th October, 2023
The weather in recent weeks has generally been favourable to most grain producing regions. Areas in the north have seen clear weather allowing harvest to progress at perhaps a pace faster than many would like. In the south, cool to mild temperatures have prevailed with some areas close to and over the Victorian border receiving rainfall that has been welcomed. The mid-range forecast points to much of the same which will allow solid harvest progress of this 23/24 crop.
The lack of rainfall in the northern part of the state and into Southern Queensland has the 2024 sorghum crop shaping up to be on the bottom end of production for many years. With the current weather pattern firmly in place, production around 2019 levels doesn’t seem to far from the realms of possibility today. Nominally, new crop delivered values into the Downs are similar to wheat demonstrating a firm bias towards well below average production. Needless to say, ABAREs current production number of around 500kmt feels a little high today.
Offshore futures markets have been trending higher after the large pull back at the end of the previous month largely on the back of political tensions and conflict in various parts of the world. Conversely, cash wheat values have been under some pressure throughout the east coast. Grower engagement has been evident without being overwhelming however equally as notable has been the withdrawal of the domestic customer from the bid side of the market. There is the usual spot buying from the local end users taking place, though the sentiment from the feed consumer is they have enough cover on for the time being.
With harvest progressing rapidly in Northern New South Wales and Queensland and production below average through these regions, it’s understandable there is a belief that values need to move higher. The caveat to this however is that at current values, cereals are pricing into the domestic market in the northern regions thus effectively putting a cap on prices. With a reduced export task out of the east coast in 2024, it is expected that road freight rates will remain lower than we’ve seen in previous years. As such, allowing grain from the southern part of the country to satisfy the domestic feedlot, poultry and pig demand in the north. This despite diesel prices being 10-20% above where they have been in the last twelve months.
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