Grain continues to flow from West to East to satisfy the intensive Livestock Industries
- By: "Farm Tender" News
- Cattle News
- Apr 25, 2019
- 598 views
- Share
This article is bought to you by Mulcahy & Co Agri Solutions.
By James Massina - AWB.
Local spot markets have struggled over the past week as demand wanes and the flow of imported grain from the west continues unhindered. Unfavourable weather conditions throughout our cropping region might have been expected to tighten markets, but this has been more than offset by the scale of domestic inflows. Just for the month of April we expect around 300kmt arrive at New South Wales and Queensland ports to satisfy the feedlot, pig and poultry demand. This has largely been the reason for the softer cash markets we are experiencing. By the end of the month around 2Mmt will have arrived into East Coast ports since the start of the cropping season. Domestic feed demand through Queensland and New South Wales is roughly 400kmt/month and as such, we can clearly see how reliant the feed consumer has been on this supply of inputs.
Ad - Mulcahy & Co Agri Solutions provides a wide range of Farm Financial Services, they make sure you get results from all your hard work - Ad
Ad - Mulcahy & Co Agri Solutions provides a wide range of Farm Financial Services, they make sure you get results from all your hard work - Ad
The ability for the industry to mobilise infrastructure and assets to facilitate the import of grain into the East Coast has been swift and despite a few teething problems, appears to have established itself well. There are now eight facilities through Queensland and New South Wales that have seen imported grains from other states arrive at these ports with the majority of grain being executed to domestic consumers via road. Without the typical exportable surplus on the East Coast, the domestic movements out of the ports have increased significantly. This has caused congestion and in turn has placed pressure on the road freight market, with carriers in high demand on a weekly basis. This highlights the reversal of the typical flow of grain, which has reduced the ability and need to transport grain to port, and fertiliser back up-country.
Ad - Mulcahy & Co Agri Solutions provides a wide range of Farm Financial Services, they make sure you get results from all your hard work - Ad
Ad - Mulcahy & Co Agri Solutions provides a wide range of Farm Financial Services, they make sure you get results from all your hard work - Ad
The surplus stock in Western Australia has priced itself out of winning large swathes of export business and in a few short months it will have to compete against cheaper-again Northern Hemisphere new crop stocks. Northern Hemisphere new crop conditions can be best described as improving as the drier March in the Black Sea region has been offset with some moisture, and wheat areas in the US generally favourable. World wheat production forecasts are largely unchanged and world wheat demand is down 3Mmt most notably due to reduced demand from the EU and Iran. Exports from Western Australia were not helped by the fact that Australia was not able to win any part of the recent tender into the Philippines which a lot were looking towards as a good indicator of our export competitiveness in any reasonable volume before Northern European new crop.
Ad - Mulcahy & Co Agri Solutions provides a wide range of Farm Financial Services, they make sure you get results from all your hard work - Ad
Ad - Mulcahy & Co Agri Solutions provides a wide range of Farm Financial Services, they make sure you get results from all your hard work - Ad
Looking forward, the picture appears similar to today with current new crop spreads from Western Australia to the East Coast close to permitting the flow to continue. Current new crop values have the East Coast well above export parity and Western Australia grain also looks expensive for export markets. It is still early days for both regions to produce a crop and all eyes will be on both zones individually and collectively to provide the other direction. Fingers crossed everyone gets what we’ve been hoping for and we produce a crop that is well overdue.
Share Ag News Via