Jul 13, 2023

Australian Crop Update – Week 28, 2023

2022/2023 Season (New Crop) – USD FOB

NEW CROP PRICES ARE BASED ON TRACK BID/OFFER SPREAD PLUS ACCUMULATION & FOBBING COSTS AND ARE NOT FOB PRICE INDICATIONS.

Australian Grains & Oil Seed Market

Australian domestic markets steadied last week, albeit to varying degrees, after the sharp declines from the previous week. Barley shipments have once again been shipped from Western Australia and imported into Queensland to meet the nearby feed demand. Southern wheat and barley edged higher after last week’s sharp decline.

May 2023 Grain Export Statistics

Australia exported a further 3.33MMT of wheat and durum in May. This lifts the Oct/May accumulative total to 22.9MMT which is up 5MMT on the same time last year. Western Australia exports are up 38% on last year, Queensland is also 38% and South Australia 46% higher. Victoria exports are up 19% and New South Wales 4% higher.

Western Australia exported a record 1.46MMT of wheat in May up from 1.1MMT in April. New South Wales wheat exports slowed to 439 thousand metric tonne (KMT) but larger exports from Queensland helped offset this. China took a further 794KMT in May lifting China’s Oct/May to 6.3MMT vs 4.2MMT at the same time last year. Vietnam was the next largest with 457KMT then Indonesia with 409KMT and then South Korea not far behind with 373KMT.

There was 600KMT of barley exported in May, slightly up on April at 593KMT. Western Australia shipped 380KMT of the May exports or 60%. Saudi was the largest destination with 126KMT. Vietnam was at 125KMT and then Japan at 105KMT. Australia’s Oct/May exports are 5.25MMT which is 9% down on last year. Sorghum exports were 456KMT with 446KMT of this going to China.

Canola exports were up 448KMT from 287KMT in April. This lifts the Oct/May to 4.1MMT which is modestly down on last year’s 4.3MMT. Victoria exported 208KMT of canola in May and 142KMT came from Western Australia.

Lentil exports were huge at 265KMT up from 152KMT in April. There appeared to be some switching from faba beans to lentils which suggests previous months were incorrectly coded. Australia has exported 1.1MMT of lentils in Oct/May which is close to double the previous years 632KMT.

Ocean Freight Market & Export Stem

The freight market remains in a sluggish state although Capes/Panamax seemed to enjoy a mini resurgence last week on the back of iron ore/coal demand. Rates in the Pacific are generally trending sideways however we did hear a 37dwt open Japan was reported fixed for Aussie round voyage at $8,750 which owners are now trying to hang their hat on. Supramax are achieving around $8.5-$9k basis South China for Aussie round voyage and Ultramax $1k premium for same. Bunkers remain relatively stable.

There was 405KMT of wheat added to the stem in the past week. This included 162KMT in WA and 148KMT and the remaining 95KMT in Vic. There was 30KMT of canola added to the stem in SA. Another 50KMT of unspecified grain was added to the stem in Newcastle NAT. There is now 100KMT on unspecified grain to be loaded from NAT in the second half of July.

Australian Weather

Seeding is now completed in both Western Australia and South Australia. Despite experiencing below-average rainfall in May, timely precipitation during June has significantly improved crop production prospects in both regions. The southern region's favourable climate conditions continue to support sizable crop production. The later-seeded crops are faring better this season due to the consistent falls over the past month.

The most significant issue in the past week was the disappointment from the forecast rain event for northern New South Wales. The recent rain event only delivered 5-15mm across the driest areas of the state where farmers needed upwards of 35mm to entice them to plant the remainder of the crop. El Nino has been flagged as a production risk for some parts of Australia and it's starting to bite. The planting window is nearly closed, and it will take a major rain event to get more crop in the ground. It’s estimated that less than a quarter of the intended wheat plantings in northern New South Wales have been planted. It’s a big deal as these areas accounted for about half the state’s wheat plantings in the 2020/21 Census and it will have a major impact on the NSW 2023/24 winter crop production.

8 day forecast to 5th of July 2023
Source: http://www.bom.gov.au/

Weekly Rainfall to 28th June 2023
Source: http://www.bom.gov.au/

AUD - Australian Dollar

The Australian dollar tracked lower through trade on Monday, scuppered by weaker-than-anticipated China data. Amid a backdrop of weaker risk appetite, the AUD tracked toward intraday lows at US$0.6630, before finding support in a weaker US dollar. The dollar could not maintain the risk-off momentum enjoyed following the China data as treasury yields moved lower, back toward the lows seen in the wake of last week's softer-than-anticipated payroll print. We expect ranges will be well contained leading into US CPI data with the AUD tracking between US$0.6580 and US$0.6730.

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Australian Hay Update – Monday 29th April 2024

29 Apr, 2024

The 2024/25 season for Australian Oaten Hay has started with sowing well underway for all growing areas. The initial expectation for the upcoming year is much the same as the current season where we saw a significant increase in acreage planted and a higher than average quality profile. With the return to normal freight rates despite the international pressures and an Australian Dollar that has been well below the 0.700 cent handle for much of the past 12 months, there has never been a better time for exporters of Australian Oaten Hay to develop new markets. Growth in interest has been seen from the Middle Eastern markets with the integration of Oaten Hay to the ration alongside alfalfa with excellent results forthcoming. As part of the Basis Commodities service offering, we like to share our insights and knowledge on our products to better support our customers. Please enjoy this report on the various considerations for Oaten Hay during the growing stage as well as our future reports in the coming months as we head towards new crop which is due for export in October/November 2024. Australian Oaten Hay: Despite the concerns with a drier season for cereal crops, less moisture, particularly at the end of the hay growing season produces a far better product to suit the dairy and livestock industries. In this month’s report, we will explain the reasons why less rainfall can actually benefit an oaten hay crop. Fibre Length and Thickness: Too much moisture during the growth cycle of an oaten hay crop will produce thicker stems and longer fibre lengths which reduces the feed test value. This is due to the nutrients of the plant being spread across a larger fibre length diluting the high levels of water soluble carbohydrates (sugar content important for palatability) and increasing the acid and neutral detergent fibres leading towards poor fibre digestion and absorption rates Lodging: Lodging is defined as the permanent displacement of a stem from a vertical posture. It is often caused by high wind speeds, made worse by wet conditions. It can happen quickly or relatively slowly, with stems initially leaning, then falling under the pressure. If too much water is received on an oaten hay crop, the plant may grow beyond a stable position and fall over. This is because the root system of the plant has not penetrated deeply enough through the soil as it has not had to search too far for moisture. The plant falls and then regrows which renders the crop unusable due to soil contamination.

Basis Commodities expands service offering to soybeans.

18 Apr, 2024

In late 2023, Basis Commodities successfully executed its first shipment of premium non genetically modified soybeans from Romania to Egypt, via two small vessels. Basis has many years of experience managing trade flows and relationships within the Middle East and we were pleased when the opportunity to add a new product – Soybeans – arose out of discussions with our suppliers in Romania and buyers in Egypt. To ensure the safe arrival of the produce, the company worked with several parties to facilitate the execution of this new flow for the company including managing due diligence, testing, insurance and contract execution. Soybeans are a primary source of protein and edible oil, making them essential for human nutrition. The largest producers of soybeans in the world are the United States, Brazil, and Argentina. These countries account for most of the global soybean production. Ukraine is the leading exporter of soybeans in Europe. However, Romania is seeing growth in this market after a long hiatus. This growth can be attributed to various factors including increased demand for soybeans globally, improvements in agricultural technology, and favourable climatic conditions for soybean cultivation in Romania. Egypt is among the top importers of soybeans in the world. The country imports large quantities of soybean, primarily for the production of soybean meal, a key ingredient in animal feed formulations. The country's growing population and expanding livestock sector contribute to the increasing demand for soybeans as a source of protein-rich feed. Basis Commodities General Manager in Dubai, Nader Ahmed said assisting companies making connections in the movement of soft commodities is a speciality of the company “we are committed to fostering international trade partnerships and promoting the exchange of quality agricultural products in the Middle East” and “We’re proud to have played a role in bringing premium soybeans into Egypts market”. For more information on how Basis Commodities and assist your business, reach out to the team on the details below