Oct 03, 2023

Australian Crop Update – Week 39, 2023

202/2024 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

The Australian normalized difference vegetation index (NDVI) crop conditions continued to slide as drier weather intensifies. Central New South Wales (NSW), some parts of Victoria (VIC) as well as parts of the northern regions of Western Australia (WA) all posted 10-14% weekly declines in the NDVI measure. Anecdotal evidence on the ground shows that crops in these areas are poor and many crops are unlikely to be harvested.

With that said, we currently have a useful rain band moving across much of VIC and NSW which will deliver much-needed finishing rain. In terms of cash values WA bids to the farmer from the trade were broadly softer. APW10.5% was down 2.2% for the week which we expect was a reaction to the forecast rain in Southeast Australia and thin export demand for wheat at current values. Barley fell 6.7% back US$16 to US$254 WA. There are likely to be a few things contributing to this with barley and canola crops handling the dry finish better than wheat and proportional production losses will be smaller because of this. We expect the other factor is that China has little appetite for feed barley at upwards of $290 Cost and Freight (c&f) China. China has started harvesting its own corn crop which offers fresh feed grain supplies to the local market. China also reportedly bought 0.5-1.0 million metric tonne (MMT) of corn from Ukraine for an Oct/Dec shipment in the past couple of weeks at values expected to be considerably cheaper than Australian feed barley. Ukraine corn is the cheapest corn in the world but it’s unclear at what value China has bought it at. Brazilian corn is currently around $280 c&f China.

Australian Pulse Market

Ocean Freight Market Update

Regional holidays in Australia and Golden Week in Asia have produced a very quiet week so far. All indices (excepting Capes) are lower as the physical markets respond to China’s lack of activity. In general, daily hire rates for all sizes are off US$1-2k per day. It is likely the market will remain listless for the remainder of the week, and we'll only know the underlying strength/weakness of the market mid-next week.

There were 365 thousand metric tonnes (KMT) of wheat, 152KMT of barley and 20KMT of canola placed on the shipping stem in the past week. The wheat was primarily in WA with single cargoes added in South Australia (SA) and VIC. Nothing was added in Queensland (QLD) or NSW.

Australian Weather

Australia posted its driest September on record with the onset of El Niño expected to bring more warm weather ahead. The nation’s total rainfall was 70.8% below the average for September, according to Australia’s Bureau of Meteorology

The forecast rain will help crops arrest the decline in crop conditions in the southern cropping areas. Southern crop vegetation anomaly ratings are still 2-6% ahead of average.

8 day forecast to 10th October 2023
Source: http://www.bom.gov.au/

Weekly Rainfall to 3rd October 2023
Source: http://www.bom.gov.au/

AUD - Australian Dollar

An eventful quarter concluded following the end of Friday's sessions for the AUD. One of the major storylines from the September quarter was the US dollar's utter dominance, catapulted from mid-July lows amidst a sustained run of superior macro data flow, emblematic of sustained outperformance for the world's largest economy. The final two trading days of the month and quarter have seen the US dollar give back some of its gains, in turn enabling the Australian dollar to rebound from year-to-date lows in the 0.6330’s to peek through 65 US cents heading into Friday's US session.

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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