May 09, 2023

Basis Commodities – Australian Crop Update – Week 19, 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 avoided the volatility of the international markets last week with some zones still trying to move grain into the export channel. Observations of the weekly farmer bid changes show Qld and NSW bids were generally a tad firm while prices in SA and WA where export supplies are much more comfortable, were notably softer.

Sizable areas of Northern NSW and Southwest Queensland remain dry, and this is slowing old crop farmer sales in the northern cropping areas.

Western Australia (WA) and South Australia (SA) wheat, barley and canola bids fell to varying degrees. Declines were larger in SA which looks to reflect the exporter coverage against shipping commitments. The SA bids tumbled for canola and barley with exporters showing no interest in chasing supplies. The absence of barley bids indicates that exporters are not convinced that a potentially positive outcome from China’s review of the import tariffs on Australian imports will translate to higher barley prices. The SA bid for canola fell more sharply than other states which we expect is related to coverage against export commitments and little willingness for ownership beyond this. WA was also softer for wheat, barley and canola.

Victorian bids were a tad softer as well. We get the impression farmer selling has picked up a little with farmers increasingly concerned that global markets may keep trending lower.

Australia exported a record 3.73MMT of wheat in March. This comfortably surpasses the previous high of 3.25MMT shipped in Jan-23. Combined wheat, barley and canola exports for March were 5.1MMT which was also a record. There was 1.134MMT of wheat shipped to China in March, and Australia has now shipped 4.44MMT of wheat to China in the Oct/Mar which is 1.4MMT more than last year. Australia has shipped 16.5MMT in the Oct/Mar which is 3.5MMT more than the same time last year. Most of this increase is in Asia. South Korea is up by close to 800KMT, Thailand and Indonesia were both up around 0.5MMT and the Philippines is up by 0.25MMT. Africa is down 0.5MMT on last year. A further 209KMT of wheat was shipped to Iraq in March to take the Jan/Mar total to 419KMT.

Barley exports were solid at 778KMT. This was mostly shipped from WA and SA. Saudi took 285KMT. Total Oct/March shipments to Saudi are 1.47MMT which is down on last year’s 1.68MMT at the same time. Vietnam took 115KMT and the Philippines took 60KMT. Malting barley continues to be shipped to Mexico and South America. Total barley exports for Oct/Mar are 4.1MMT vs 4.36MMT at the same time last year. Sorghum exports for March were 276KMT. This included 242KMT from Qld and 25.7KMT from NSW. China took 245KMT.

Pulses Market Update

Australia exported 53,448MT of chickpeas and 168,650MT of lentils in March, according to the latest export data from the Australian Bureau of Statistics. The chickpea figure is down 32 percent from 78,213MT shipped in February, while the lentil figure is down 14pc from the 196,224MT on the month.

Ocean Freight Market & Export Stem

It was a very uninspiring week, and it remains to be seen whether the passing of regional holidays brings players back to the market with cargoes in their hands or not. At risk of stating the obvious, the former will see the market regain some semblance of stability and positivity, the later will see rates continue to ease off. Ominously backhaul numbers are again generally parity to a Pacific round voyage as Owners lose faith in the Atlantic market.

In the Pacific there is no clear driving force – the market is just ticking over. China remains subdued and the positivity we have previously seen in the FFA curve towards the end of Q2 and through Q3 is flattening out.

There was 447KMT of wheat, 107KMT of canola and 90KMT of barley added to the stem in the past week. Nearly half of the wheat additions were in SA and Vic with smaller volumes in WA, NSW and Qld.

Australian Weather

Last week, Basis Commodities published an article about Australian weather, looking at the difference between La Nina and El Nino and the climate drivers weather analysts watch to predict the long range forecast. You can read it by clicking here.

AUD – Australian Dollar

The Australian dollar is slightly stronger to start the week when valued against the Greenback. The AUD/USD pair climbed to a two-week high on Friday 5th May on the back of US Nonfarm Payrolls exceeding expectations. Last Tuesday the Reserve Bank of Australia (RBA) raised its cash rate by 25 basis points (bp) to 3.85% after first-quarter Consumer Price Index (CPI) came in at 7% year-on-year to the end of March, well above the 2-3% mandated target band.

The post Basis Commodities – Australian Crop Update – Week 19, 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