Grain Update | Sorghum prices rally in heat
New season sorghum prices climbed above $280 a tonne delivered into Newcastle last week.
NORTHERN NSW sorghum prices ended last week sharply higher, with weather forecasts showing no sign of an end to the dry weather and scorching heat.
New season sorghum prices climbed above $280 a tonne delivered into Newcastle last week, up by about $15/t on the previous week as expectations of the size of the crop erode.
Searing heat and no rain is visibly taking a toll on sorghum crops around Moree as it drains crop of remaining moisture reserves.
Last week’s daytime temperatures hovered in the 39 to 40 degrees Celsius range before the weekend change brought it back to the low to mid 30’s.
Troublingly, the near-term weather forecasts are offering no sign of relief in the foreseeable future.
Farmers were hoping the cyclonic weather across northern Western Australia may push much-needed moisture across into Queensland and northern NSW, but this has failed to eventuate as the moisture system continued to hug the west coast.
Sorghum crops around Moree are already showing visible signs of moisture stress and this can only worsen if the current hot, dry weather conditions persist.
Longer term outlooks from Bureau of Meteorology point to more favourable weather in the medium term. The February to April rain outlook shows most of eastern Queensland are likely to be wetter than average, according to the outlook.
February is likely to be wetter than average, the Bureau said.
Traders were cautious about the favourable weather outlook for the northern summer crops, saying the December medium term forecast also predicted wetter and cooler conditions, and this failed to materialise.
Alternative feed grains such as wheat and barley also strengthened last week as buyers factored prospects that the upcoming sorghum crop may not be as large as they were hoping. Darling Downs stockfeed wheat ended the week $7/t higher at $322/t and feed barley matched these gains. But sellers are scarce.
Strength in the northern grain markets resulted in a general strengthening in the east coast grain prices last week, as the summer crop production fears reverberate south.
Port Kembla and Melbourne wheat values tracked the north higher, ended the week $5/t to $8/t higher, as buyers ignored further gains in the Australian dollar and a late selloff in US wheat futures.
Chicago Board of Trade wheat futures tumbled on Friday after the US Department of Agriculture revealed larger than expected winter wheat plantings in the US.
At the same time, the USDA also lifted its estimates of Russia’s 2017-18 wheat crop by two million tonnes to 85 million tonnes, a whopping 12.5 million tonnes bigger than last season’s previous record large harvest.
Russian wheat exporters were up by 1.5 million tonnes to 35 million tonnes, up 7.2 million tonnes on last year.
Aggressive Russian wheat exports continues to erode export demand for other origins, including Australia.