Sep 18, 2023

Australian Crop Update – Week 37, 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 Market Update

Australian wheat bids were firmer last week on the back of dry weather forecasts and shrinking crop expectations. New crop wheat was up US$6 per metric tonne (MT) during the week, and up over US$60/MT over the last month. Increases were seen across most port zones. South Australia (SA) saw the sharpest weekly gains, although this was largely catching up with other port zones. New crop wheat in Victoria (VIC) is US$300 FOB. Kwinana APW1 was up US$3/MT for the week to US$298 FOB. Queensland (QLD) and Northern New South Wales (NSW) are reflecting larger premiums for wheat which will draw additional supplies into the domestic market for feedlots.

Barley bids were modestly firmer last week across most zones with the crop concerns although gains were not as large as wheat.

Canola bids drifted lower with the selloff in Canadian and French futures.

The 23/24 harvest commenced in Central QLD last week. It is too early to offer any feedback on yields or quality. We expect average yields given the season and the quality should be good with plenty of high protein wheat hitting storages this year.

Australian Pulse Market

The Australian pulse market can be described as a weather market for farmers at this point in time who have high expectations of pricing with little demand. With the European season gathering the attention of international customers, Australia is uncompetitive at this stage across the board for chickpeas, lentils and faba beans. In some cases, farmers expect USD750/MT FOB for new season chickpeas which is well above export parity.

Harvest has commenced in the northern regions bringing in new season chickpeas. However, we are still some five to six weeks away from any real momentum further south for the faba bean and lentil crops. At this stage, crop conditions are favourable for the southern regions and with a drier finish will see lower yields but higher quality. It is expected that pricing will come back at harvest where export opportunities for Australia can be found.

Ocean Freight Market Update

Another week has passed and the market has continued to firm across all segments. The Atlantic is still leading the way where Supramax and Ultramax sizes are now fixing in the 23/24k for front haul business and Handymax sizes are now asking 18/20k level for same. The firmness of the Indian Ocean is now seeping into Southeast Asia where there have been reports of Supramax sizes fixing in the mid/high with rumours of a Ultramax’s fixing in excess of 20k for quick Indo/China coal run. Bunkers still remain firm with prices in Asia around $650/675pmt level in the major ports

It is still hard to pinpoint the reasons behind the recent improvement rates however the longer it goes on, the more faith Owners have in it continuing. All the forward paper is currently trading at a premium to spot levels for the rest of 2023 so charterers are starting to believe this push will be sustained in the medium term.

Australian Weather

Recent rainfall in southern WA will benefit crops there preventing further downside in the short term.

Weather models continue to report a warm, dry outlook for the coming weeks in most areas although southern VIC and southern SA may get some rain this week.

The models are dry for the second half of September with above average temperatures expected. The Bureau of Meteorology is showing a completely dry October with average daytime temperatures expected to be 2-3 C warmer than normal.

There were sharp declines in the vegetation index anomalies in the northern cropping areas in the first week of September.

Australia is bracing for a hotter southern hemisphere spring and summer this year after the possibility of an El Nino strengthened and the Bureau of Meterology said the weather event could likely develop between September and November.

8 day forecast to 26th September 2023
Source: http://www.bom.gov.au/

Weekly Rainfall to 18th September 2023
Source: http://www.bom.gov.au/

AUD - Australian Dollar

The Australian dollar is weaker to start the week when valued against the US Dollar trading above 64 US cents. The Australian Dollar reversed its course against the US Dollar after registering gains during the Asian session where China retail sales and industrial production grew faster than expected in August. Industrial production grew 4.5% y/y in August, while retail sales, increase 4.6%. The Chinese economy has struggled to rebound amid a property slowdown, declining exports and low consumer demand. The Australian Dollar strength has a direct correlation to the strength of the Chinese economy hence if China is slower then Australia will follow.

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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