Price, yield rises help sprout har­vest of hope

Countryman - - NEWS - Cally Dupe

WA grain grow­ers re­main in a dual sweet spot for prices and yields, with Aus­tralian Hard 2 wheat bids this week reach­ing prices not seen in sev­eral years.

Bids for AH2 depart­ing CBH’s Kwinana Grain Ter­mi­nal peaked at $430 a tonne this week, driven by de­mand for high-pro­tein wheat to ful­fil con­tracts for bread, flat breads and steamed prod­ucts.

It’s the high­est price for AH2 wheat since 2010 and 2007, when drought-like con­di­tions sent wheat prices climb­ing.

WA wheat is beat­ing gains in global prices, with a 20 per cent price surge last month par­tially driven by dry con­di­tions in Europe and the Black Sea.

CBH mar­ket­ing and trad­ing gen­eral man­ager Ja­son Craig said the $10 pre­mium for AH2 wheat, com­pared to APW1, had quadru­pled, with buy­ers now pay­ing pre­mi­ums of up to $40 a tonne.

“This has seen AH above $400 a tonne free in store,” he said. “APW1 prices con­tin­ued to re­main firm at lev­els be­tween $356-370 per tonne free in store (this week).”

Me­cardo com­mod­ity an­a­lyst An­drew Whitelaw said AH2 prices of that na­ture had not been seen since at least 2010.

“It is a his­tor­i­cally high num­ber,” he said. “These are good prices but they are also pre­mium prices trad­ing above in­ter­na­tional val­ues . . . that is a good news story.” CBH es­ti­mates about 40 per cent of WA’s wheat crop is low in pro­tein this sea­son, which ex­perts at­trib­uted to con­ser­va­tive ni­tro­gen ap­pli­ca­tion across the State.

Grain Grow­ers WA re­gional co­or­di­na­tor Alan Mel­drum said WA grow­ers had scaled back on ni­tro­gen ap­pli­ca­tion early in the sea­son be­cause of dry con­di­tions.

“We had a conundrum around not hav­ing the con­fi­dence to put enough ni­tro­gen on the crop when it can make a dif­fer­ence,” he said.

“It is hard not know­ing what spring rainfall is go­ing to do. If grow­ers had a de­cent Septem­ber rainfall, we would have got more yield which would have meant less pro­tein be­cause we weren’t sup­ply­ing any fur­ther nu­tri­ents.”

WA is ex­pected to ship more than two mil­lion tonnes of grain to Aus­tralia’s east coast this sea­son after a pro­longed dry spell caused con­tract washouts and feed deficits.

How­ever, Mr Craig said east coast in­ter­est had re­mained flat this week as users fo­cused on lo­cal har­vest in their re­spec­tive re­gions.

WA’s bar­ley mar­ket con­tin­ued to grow this week, with more than four mil­lion tonnes in the bins.

CBH re­ports more than 35 per cent of re­ceivals so far have met malt spec­i­fi­ca­tions.

Mr Craig said prices re­mained above $300 free in store with feed bar­ley trad­ing at $310 to $315 a tonne and malt bar­ley fetch­ing a $10 a tonne pre­mium.

Canola prices have re­mained sta­ble this har­vest, at about $575 - $580 a tonne, which CBH at­trib­uted to “rel­a­tively good Euro­pean de­mand” and some in­ter­est from the east coast.

As WA’s har­vest moves into the fi­nal few weeks, traders are strongly fo­cused on ex­e­cut­ing busi­ness.

Mr Craig said more than two mil­lion tonnes of grain was ex­pected to be shipped from WA be­tween now and the mid­dle of Jan­uary.

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