Jun 06, 2023

Australian Crop Update – Week 23, 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 bids were softer last week with rain on the forecast for much of southern Australia. Buyers are hopeful rain will flush out farmer selling but the offers were little changed as we entered the week. That said, the rain received has been helpful across several areas and it has highlighted the danger of running ahead of the weather with crop forecasting as ABARE’s did with their 26.2MMT forecast for the wheat crop. Whilst one has sympathy for their dilemma given the chorus of El Nino forecasts and the correlation with droughts / reduced crops, we still have a lingering La Nina in play and changes in systems of this scale are rarely quick. So we are more cautious in terms of crop predictions this far out from harvest.

On the demand side, the bottom line is that Australian wheat and barley are globally uncompetitive at current values and its old crop shorts, slow farmer selling and new crop weather concerns that are keeping Australian cash values supported versus Black Sea cash values, which have been in free fall from week to week. It remains to be seen whether Australian values will be further supported by Chinese wheat quality concerns. It is a question of watch this space, but the promise of further exports cannot be discounted.

Ocean Freight Market & Export Stem

In terms of ocean freight, it is again a narrative of ‘different week, same story’. There has been limited activity with Indonesian coal, and Chinese iron ore markets are still weak. Very little to get excited about.

Another 900KMT of wheat was added to the stem in the past week. SA was the largest contributor accounting for 385KMT of the weekly additions followed by WA with 240KMT, and Vic and NSW both chipping in with 100KMT plus. A further 115KMT of sorghum was added to the stem in the past week (55KMT Newcastle and 60KMT Brisbane) as well as 116KMT of canola and 60KMT of barley.

Australian Pulse Market

Last week, the PULSE 23 conference in Sydney welcomed guests from all over the world. The sentiment was that Australia would see smaller crops this season.

Australian Weather

Weather forecasts continue to point to general rain across many cropping regions for the coming week. Coastal areas of WA saw heavy rain over the weekend. Parts of western NSW saw 20-30mm which is consistent with forecasts from the major models for most of last week. The rain in WA is expected to cling to the coast and not offer additional moisture for the cropping areas, but showers are expected to persist throughout the week. The trough across SA and NSW is expected to deliver widespread rain for much of SA and VIC cropping areas and then develop into more general rain across NSW later in the week. The heaviest of the NSW rain is expected to be in the south with only lighter falls reaching the dry northwest of the state. Below is the ACCESS model through to next weekend.

Source: bom.gov.au

AUD – Australian Dollar

The Australian dollar finished stronger to end last week when valued against the Greenback and is currently trading above 66 US cents. The RBA is expected to hold rates at 3.85% in June but economists and money markets remain divided over its next move as lingering price pressures and recovering home prices suggest a hike may be needed while weaker activity and rising unemployment argue for a pause.

The post Basis Commodities – Australian Crop Update – Week 23, 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