May 04, 2023

Basis Commodities – Australian Crop Update – Week 18, 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 cash markets came under further pressure last week with the sharp declines in U.S. wheat futures and forecast rain for North-West New South Wales which had missed earlier rain events.

With bids retreating quickly, farmer selling has been slow, but it seemed to pick up a little late last week according to trader reports. The reality is that new export sales now must be made at significantly lower levels than where the previous sales have been made to be competitive with Northern Hemisphere new crop prices. Traders have been giving away elevation margins for some time now, but even now Australian wheat looks expensive compared to other origins.

Grain Trade Australia provided an update on the China barley situation. They said the review would take three months with the possibility of a one-month extension. Any hopes that China may turn buyer are now giving way to the negative global feed grain outlook and Barley values are also being dragged lower.

Planting ahead of the new crop is progressing well in most areas with timely rains encouraging farmers in most areas. The general consensus is that there has been little drop off in the planted area and the start is as good as last year.

Ocean Freight Market & Export Stem

The back end of last week was pretty dire for owners as cargo interest dried up ahead of the global May-day holidays. Owners with near-spot tonnage had to take whatever they could to get covered and so some ugly numbers were reported. Red ink prevailed across the board from Panamax to Handysize. Is this representative of the wider market when China returns today is anyone’s guess. It feels like this is going to be a very flat week already.

More than 1.3MMT of grain and pulses were added to the shipping stem in the past week. This included 875KMT of wheat, the most in four weeks. Barley and sorghum additions were also strong at 193KMT and 150KMT respectively. East coast wheat additions improved in the past week with a combined 383KMT between Queensland, New South Wales and Victoria. There were serval sorghum boats added in the past week into Brisbane and Newcastle over multiple berths. No new canola ships were added.

In general however, wheat shipments continue at a record pace. The March wheat departures by the stem equate 3.1MMT before container shipments are added, and April and May are close to 2.8MMT. Western Australia continues with its impressive shipping pace with the stem indicating 1MMT plus a month Jan/May.

Pulses Market Update

In 2022, Australia exported 1,042KMT of lentils, marking a 25% increase from the previous year. The top destinations for Australian lentils were Bangladesh, India, Sri Lanka, UAE, Egypt, and Pakistan. Notably, Bangladesh was the leading importer, purchasing 391KMT of lentils. India was the next significant consumer, buying 275KMT, followed by Sri Lanka at 104KMT. The trend continues in 2023, as the country has had a strong start in the lentil export market. In the first two months of the year (January-February), Australia exported a total of 346KMT of lentils, a substantial 65% increase compared to the same period in the previous year. India remained the top consumer, importing 155KMT, followed by Bangladesh with 51KMT, and Turkey with 36KMT of total Australian lentils exported during this period. It is anticipated that the export of Australian lentils will reach close to 1 million tonnes in the year 2023.

Source: AgPulse Analytica https://agpulseanalytica.com/

Australian Weather

Australia is off to a very good start with 85-90% plus of national cropping areas having received enough rain to germinate winter crops by the end of April. Extended weather models continue to point to a drier and normal winter. The Bureau Of Meteorology updated its outlook during the week and pointed to drier than average for May to July across most of Australia. ENSO conditions are neutral with signs of that an El Nino could form during the winter. Similarly, the IOD is also neutral, but a positive IOD could develop in the coming months. Both are bad news for Australian rainfall for the winter and spring.

AUD – Australian Dollar The Reserve Bank board lifted the official cash rate from 3.60% to 3.85% in a surprise move just a week out from the federal budget, amid signs households are continuing to feel cost-of-living pressures. Reserve Bank governor Philip Lowe said inflation, at 7%, was still too high and would take some time to come back down to the bank’s target range of 2-3%. The dollar remains range bound for the time being.

The post Basis Commodities – Australian Crop Update – Week 18, 2023 appeared first on Basis Commodities.

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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