GRAIN production concerns throughout NSW and Queensland this season have created a pricing dynamic not experienced by the market for some time.
Michael Vaughan, southern NSW accumulation manager with ADM, said with the spotlight on northern domestic markets, grain had been priced from south to north for domestic use since mid year, but it also now included deliveries into the bulk handling system for the upcoming harvest.
Mr Vaughan said due to the Pt Kembla port zone trading higher than the Melbourne port zone, growers may travel longer distances at harvest to capture the potential premiums southern Pt Kembla sites could offer over Melbourne.
“So, no matter the marketing strategy – as everyone is different – spending some time watching prices in your broader region, as opposed to your traditional delivery point, may prove very worthwhile,” Michael said.
“However, growers need to be aware that if they elect to deliver into a different port zone, capturing the benefit at that time will be crucial, as markets can change.”
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From the Darling Downs to the Victorian border, the market was expecting liquidity to be restored as farmers sold into the harvest window.
“In some cases production is known, therefore there is some confidence to capture current pricing opportunities,” Mr Vaughan said.
On the export front, activity is expected to be limited from NSW, but stronger from western Victoria, South Australia and southern Western Australia, including Albany and Esperance.
“While particularly the Albany and Esperance ports will do the heavy volumes, history shows us that even during the drought years of 2006-07, exports continued out of NSW and QLD, albeit at greatly reduced volume,” Mr Vaughan said.
“We may see this again, if and when the market settles down in 2018.”
Leading into harvest, ADM will be posting site bids for wheat, barley and canola. The company also welcomes discussions with growers throughout the Riverina who prefer to store on-farm.
Growers can sign-up for ADM’s Grain Prices app or SMS service at www.admgrain.com.au/prices.