Feb 15, 2023

Basis Commodities – Australian Crop Update – Week 7, 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 Market Review

Australian domestic markets were firmer in most areas on domestic and exporter short covering. The choppy price patterns continue as buyers push values higher at the regional level on short covering before pulling bids back when square.

Wheat and barley both strengthened last week. Barley values were firmer with exporters hopeful the meeting between Australia and China’s trade ministers may lead to China ending its unofficial ban on Australian imports. Comments following the meeting were encouraging but also flagged no immediate changes and that progress may take time.

Australian Export Data (ABS) to end December

Australia exported 2.667MMT of wheat, 1.08MMT of barley and 0.884MMT of canola in December. The combined monthly wheat, barley and canola exports for December were 4.635MMT which is 550KMT more than last year’s monthly high set in March 2022.

*Source: AgScientia – https://www.agscientia.com.au/*

Wheat:

China accounted for 859KMT of the December wheat exports. Indonesia was the next largest with 381KMT followed by South Korea with 299KMT, then the Philippines with 294KMT and Vietnam taking 177KMT. Australia has shipped 1.65MMT of wheat to China in the first quarter of the new marketing year.

Barley:

There was 535KMT of barley exported to Saudi in December. Japan was the next largest with 178KMT. Interestingly a panamax also went to Iran.

Sorghum:

Exports fell to 48KMT from 107KMT in November with China accounting for most of this.

Canola:

Most of the 884KMT canola exports in December went to Europe. Other notables were 117KMT to Pakistan and 65KMT to the UAE.

Shipping Stem & Ocean Freight

It’s been a busy week for shipping stem additions in Australia with 1.4MMT of wheat, barley, canola and lentils put added in the past week. This included nearly 1.1MMT of wheat, 284KMT of barley and 48KMT of canola. Most of the vessels added were for March shipment.

The freight market had a sense of “same again” last week but we feel there is definitely a slow burn on sentiment that hasn’t quite reached the critical point yet. Tonnage lists are slowly tightening – especially in the Pacific and charterers are quietly hedging their bets by fixing forward off market. It remains the case that owners want premiums to fix business more than two weeks forward but likewise they are quick to drop their rates when they have a ship to fix in the next 7-10 days. Optimism on the forwards but pragmatism on the nearby. The FFA market has been very up and down but the premiums for forward are consistent. Owners have kept their nerve for period tonnage and are holding out for numbers that reflect a strong premium over todays rates ($14kpd for 1yr tc on 38kdwt vs $9.5kpd on pac rv….). For those keen to take periods – and there are numerous operators looking for physical cover at the moment – indexated deals seem to be in vogue so they are sacrificing the potential forward profits in order not to take too big a hit up-front.

Pulses

Lentil exports were 166KMT in December. India took 87KMT, Bangladesh 36KMT and then the UAE with 24KMT. Chickpea exports for December were 70KMT with 37KMT of this shipped to Bangladesh and 20KMT to Pakistan. Faba bean exports in December were 24KMT.

Jumps in export figures for all pulses reflect new-crop availability and compressed early shipment demand created by a harvest that was slow to start and rain-delayed.

Currency

The Reserve Bank of Australia has increased rates for the first time in 2023, by an expected 25 basis points (0.25%) to 3.35%. This is the highest level of interest rates since 2012. The AUD is currently sitting just under .70 US cents.

Australian Weather

8 day forecast to 23rd February 2023
Source: http://www.bom.gov.au/

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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