Nov 01, 2023

Australian Crop Update – Week 43, 2023

2023/2024 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.

New Crop - CFR Container Indications PMT - LH Nov/Dec'23

THE BELOW PRICES ARE INDICATIONS TO THE MAIN CONTAINER DESTINATION, NOT FIRM OFFERS. TO OBTAIN SPECIFIC PRICING FOR SPEICIFIC GRADES AND QUALITIES, PLEASE CONTACT STEVEN FOOTE ON STEVEN@BASISCOMMODITIES.COM.

Australian Grains Market Update

The Australian wheat and barley market came under further pressure last week as harvest pace increased with exporters unwilling to chase supplies at current values. Wheat bids were 2-3% lower on the east coast and about 1% lower in Western Australia (WA). APH13% premiums eased in Queensland (QLD) and Northern New South Wales (NSW) with traders reporting a little more protein wheat as the harvest moves south. Farmer selling interest picked up in Victoria (VIC) with farmers wanting to clear storages ahead of harvest. WA barley bids crept up USD3 per metric tonne (MT) higher on the back of strong sales into China.

In terms of yield, the current harvest is a mixed bag with some areas over delivering and others underwhelming in production terms. Northern NSW and Southern QLD have not seen as much high protein wheat as was expected whereas WA and South Australia (SA) are seeing higher protein than they have seen for a couple of years with lots of APW and AH2 reported.

Australian Pulses Update

The Pulses harvest has also commenced with the northern growing regions seeing most of the activity in chickpeas. In some isolated areas in the south, harvest for lentils, faba beans and lupins has also started. However, we are still approximately three to four weeks away from seeing significant volumes. At this stage, the estimate for the Australian faba bean production is approximately 1.6 million metric tonne (MMT) which is down from last year. This is mostly due to the dry finish. In addition, lentils are also expected to be lower at around 1.2MMT.

Grower price expectation is considered to be above export parity. However, the market has reported some northern faba beans trade into Saudi Arabia in containers. The northern beans usually trade at a USD20-30/MT discount to southern beans due to the variety performance and size differences. More information and activity will come to market over the coming weeks as the crop profile during harvest is further understood for the 2023/24 season.

Ocean Freight Market Update

With the amount of red ink visible across the freight Indices at the moment, you would think the market should be in free fall, but it isn't. There are some notable market players saying they think this is a temporary dip and the underlying tone remains firmer than today's expectation, but for the time being, the bears have control. From our perspective, it feels like the cargo side is very quiet and that combined with more vessels arriving from the Atlantic is keeping the market under pressure.

There was 284 thousand metric tonne (KMT) of wheat added to the stem in the past week, 185KMT of canola and 180KMT of barley. WA dominated the additions accounting for 2/3rd of the weekly wheat additions and all of the barley and canola. There was 70KMT of wheat added into VIC which is expected to be old crop wheat coming to market as farmers clear on farm storages ahead of harvest. NSW and QLD remain void of new additions which is expected to be a familiar theme for the 2023/24 season, although there was 27KMT of wheat added in Central QLD as well as a sorghum vessel.

Australian Weather

There have been few harvest delays over the last week due to rainfall and the same is expected for the next 7 to 10 days. Showers are forecast for coastal cities on the east coast with only 10-15mm expected for the next few weeks. The greater focus will be on what happens after harvest with the need for good summer rains to provide sub-soil moisture for the 2024/25 winter crop.

8 day forecast to 7th November 2023
Source: http://www.bom.gov.au/

Weekly Rainfall to 31st October 2023
Source: http://www.bom.gov.au/

AUD - Australian Dollar

The Australian Dollar offered little to excite investors through trade last week tracking within what has become a familiar range as market attention drifted to what promises to be a week loaded with headline data events. Having edged toward US$0.6350 leading into last week's close, the AUD has given up 20 points to open the week as markets respond to an escalation in the conflict between Israel and Hamas at the weekend. The risk off mood is unlikely to send the AUD spiralling back below US$0.63 but should be enough to cap gain ahead of key headline events this week. The current AUD support levels are at US$0.6270/80. If it trades through this, it will have further downside to low US$0.6200’s quickly.

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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