In this month’s edition we are reminding growers to ask their local Elders branch about signing up with Clear Grain Exchange. Sign up is simple and it costs nothing to list your grain for sale.
With over 300 registered buyers, CGX offers unrivalled access to buyers willing to pay your best price, you don’t have to settle for the buyers’ best bid. Read on to find out how CGX can work for you.
From the field
Western Australia
“Western Australian harvest is well and truly under way with some impressive yields and quality reported.
“The only areas that are having a slow start is on the south coast where rainy conditions are making it hard for growers to have a decent go.
“The biggest issue currently is bin space for growers to deliver grain. Many smaller bins are already having to close stacks as they are full. This is causing logistical issues as everyone tries to find somewhere to put all the grain.
“Looking ahead, there are questions on the supply of canola seed for 2023. There have been many reports of yield losses from using F2 retained seed. Some of these have been up to 500 kilograms per hectare (ha). On current prices this could equate to a $300 to $400 per ha loss. So, the demand for new hybrid canola seed is high.”
Bill Moore, Elders Technical Services Manager, Western Australia.
New South Wales
“Harvest is in full swing across most of the state and overall yield is reasonably good.
“However, there are quality issues with weather affected grain which will result in price downgrades in cereal crops.
“For summer crops, cotton and sorghum is up out of the ground and looking good.”
Sally Broadhead, Elders Technical Services Manager, New South Wales.
Harvest pressure on prices
Nathan Cattle from Clear Grain Exchange shares his thoughts on the current grain market and what’s been happening on the exchange.
Grain prices being bid to Australian growers are significantly lower than where they have been in recent months.
This is being driven by local supply and demand, not the price of grain in international markets.
Yes, CBOT wheat futures have weakened recently, and the Australian dollar has increased.
But international free on board (FOB) and cost and freight (C&F) bid/offer/trade values of physical grain remain well above prices bid to Australian growers.
Russia is setting the world price as it is reportedly the cheapest major exporter.
Recently, Russian feed wheat was indicated around US$300 per tonne (/t) FOB ex their ports which works back to approximately AU$410/t WA FIS and A$390/t track eastern states.
Russian feed barley was indicated US$290/t FOB which equates to approximately AU$390/t FIS WA and AU$370/t track east coast.
Feed wheat into Thailand sold recently for the equivalent of AU$440/t FIS WA and AU$420/t track eastern states on paper.
These are just a few global pricing points, and granted Australian exporters are facing higher supply chain costs than normal.
Demurrage, insurance, and other costs associated with delays and other risks need to come out of the aforementioned converted prices.
Regardless, Australian grain prices do not need to get cheaper to remain competitive into international markets.
So why are Australian grain prices lower? Harvest is well and truly underway in many areas of Australia and reports are many growers are selling into cash bids as trucks deliver grain.
A buyer will not push prices higher than where a grower is selling to them. Nor should they. That’s how a market works.
But growers should realise that selling into cash or contract bids as trucks deliver grain will weigh on prices. This is the traditional “harvest pressure on prices”.
Another method to sell your grain is to offer it for sale at the price you deem is fair value to all buyers on an independent and secure grain exchange like CGX.
If more growers were offering grain for sale at higher prices, Australian grain and the price you receive would very likely be trading at much better prices.
There is a lot of grain that still needs to be bought for export and domestic use which means there is demand for your grain and it will trade at a price.
Growers have a say in what price grain trades at. Don’t add to the harvest pressure.
Market indicators
The information contained in this article is given for the purpose of providing general information only, and while Elders has exercised reasonable care, skill and diligence in its preparation, many factors (including environmental and seasonal) can impact its accuracy and currency. Accordingly, the information should not be relied upon under any circumstances and Elders assumes no liability for any loss consequently suffered. If you would like to speak to someone for tailored advice relating to any of the matters referred to in this article, please contact Elders.