May 30, 2023

Australian Crop Update – Week 22, 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 domestic values continue to strengthen amid expectations of a dry season and sluggish farmer selling. All port zones were firmer as traders lifted bids for supplies in up-country storage sites and domestic consumers reduced short positions. Sorghum bids are steady to softer with the downturn in Chinese demand and Australian supplies now expensive against other feed grain alternatives, such as Brazilian corn. The longer-term dry weather outlook is impacting medium term decision making and it’s not just about the east coast. Western Australian (WA) bids were 5% higher across both wheat and barley for the week. With that said, this week rain has appeared in the 10-day forecast for much of the country and some rain has fallen in southern WA which re-enforces the point that any discussion on the size of the Australian crop at this stage is more a weather forecast than fact.

Early forecasts for Australia’s 2023/24 wheat crop are coming in at around 28-29 Million Metric Tonne (MMT) based on a similar planted area of 12.5 – 13.0 million hectares and a return to average yields around 2.2 tonne per hectare. Forecasters favour having a below average yield bias for the coming season based on the seasonal weather outlook, but we prefer to leave this outside the balance sheet until the yield is no longer seen as achievable, which is some way off yet.

Ocean Freight Market & Export Stem

The freight market remained range-bound over the past week where very little of note is happening. Commodity traders across all the products seem to be lacklustre which is maybe indicative of the general economic malaise affecting the world at the moment. There are potential signs in Southeast Asia of another micro cycle emerging however the relative up/downsides (standard deviation) are much less than we have seen over the last two to three years. Handymax vessels in Southeast Asia feel a bit tighter, but in truth, it’s a bit notional and too early to call at this stage. The market is again seeing larger ships earning lesser rates. Panamax levels are in the mid $8k’s pd for pacific round voyage and sub $5k for Atlantic b/h. Ultramax tonnage is fixing between $9-10k for pacific round voyage and Japan spec Handymax’s between $9-11kpd. Supramax and handymax tonnage is not discounting much at all for b/h to Cont/Med at the moment – pretty much a full round voyage rate applies.

There was 737KMT of wheat, barley and canola added to the stem with more than 500KMT or 70% of it to be shipped from WA. There was 478KMT of wheat shipments put on the stem in the past week including 373KMT from Western Australia. There was also 107KMT of barley added to the stem in Western Australia in the past week as well as 58KMT from Victoria.

Australian Weather

With weather turning dry throughout May, reports have surfaced that the topsoil is starting to dry out in a few areas which is not only breaking the linkage with the better subsoil moisture further below, but also is impacting germination strike of later sown crops. However, the 8-day forecast is for rain across most southern areas.

AUD – Australian Dollar

The Australian dollar was slightly weaker on Monday morning when valued against the USD trading at its year-low of 0.6517. The AUD/USD pair continued its downward trend on Friday. On the data front last week, Australian Retail Sales failed to meet expectations, remaining unchanged from March. This lackluster performance reflects the challenges faced by consumers due to the impact of rising interest rates and persistent inflation.

The post Basis Commodities – Australian Crop Update – Week 22, 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