Sorghum the shining light of grains market
By James Massina
1st March, 2023
As we tick over into Autumn this week, all eyes are on the short and long range forecasts. With sowing fast approaching, the focus is squarely on the updates from the Bureau of Meteorology and discussions around subsoil moisture. Unfortunately today, the Bureau is tending towards a drier Autumn for much of the country with the chances of New South Wales exceeding median rainfall below 50%, all the way out to June. Pleasingly however, most of the state is carrying in a lot of subsoil moisture from the troublesome rainfall received over the October to December period.
Wheat values have generally been firming over the last few weeks, both in the old and new crop markets. New crop values have climbed $10-$15/mt arguably on the back of the drier weather outlook for the coming season. Despite this, there has been grower engagement at these track levels of $400/mt and above.
Not unusual for this time of year, Brisbane track has been trading a premium to Newcastle, which has been trading at similar values to Port Kembla. With Victoria trading a discount to the northern markets. Old crop markets have also been firm with nearby demand driving a lot of the action. There continues to be the deliberation faced by the delivered seller of taking the risk on selling higher quality into the ports at the risk of being rejected or downgraded, versus selling the up-country domestic home stock feed wheat quality. Needless to say, there would be milling wheat already finding its way into feedlots.
Barley markets have generally been following wheat through the northern part of the country with price action here lagging other grains. From an export perspective, the market is almost entirely focused on the ongoing discussions with China and whether that trade flow will resume. Until such time as that is resolved, the barley market throughout northern New South Wales and Queensland will continue to trade relativities to wheat.
Sorghum has certainly been the shining light of the grain markets of recent weeks as harvest begins to gather pace through Southern Queensland and the northern part of New South Wales. For some time, sorghum has been trading at or slightly over wheat into the domestic market, yet despite this it has managed to continue to appreciate in value. In the last month values have climbed $20-$25/mt on the back of the market needing to fill the pipeline for both domestic and export execution.
It has really been the delivery into prompt homes that is driving the market with bulk, containers and the intrinsic domestic sorghum consumer all vying for position. As is often the case, growers have been focused on assessing the quality of the harvest, then fulfilling any pre harvest commitments. It has been clear that after those have been satisfied, the grower has been a willing seller at current values. Whether these values can be sustained for any length of time will depend largely on the size of the export program, and how far it is booked out the curve.
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