Australian Crop Update – Week 10, 2024

Australian wheat bids tumbled last week as buyers pulled back prices amid the sliding cash markets. East coast wheat bids were back USD5-12 per metric tonne (/MT) depending on the locations. Adelaide zone tracked the east coast values with wheat down USD9-12/MT. Western Australia (WA) saw the biggest declines with bids pulling the calculated FOB values back into line with the South Australia (WA) and Victoria (VIC).

Barley bids were softer but didn’t collapse like wheat. Barley was down USD8/MT equating to around USD225/MT FOB equivalent but this is still far above its Black Sea competition.
 
ABARES raised its final numbers for Australia’s 2023/24 wheat production by 500 thousand metric tonne (KMT). For winter crops, whose harvest is now complete, the bureau estimated that 26 million metric tonne (MMT) of wheat, 10.8MMT of barley and 5.7MMT of canola were produced in the 2023/24 season.

Australia’s wheat exports climbed to 2.72MMT in Jan’24 up from 1.38MMT in Dec’23. It was the largest monthly wheat export number in eight months. WA exported 1.29MMT with 678KMT from SA, 435KMT from VIC and 301KMT from New South Wales (NSW). China was the largest destination with 982KMT, the most since April last year. Indonesia was second with 548KMT, which was the most since August. The Philippines and Japan both took more than 200KMT.
 
Barley exports for Jan’24 were 928KMT with close to 600KMT of this coming from WA and 244KMT from SA. China was the largest destination with 724KMT. Australia has shipped 3.6MMT of barley to China since Sep. Japan was the next largest destination with 91KMT and then Mexico with 61KMT.

The Pacific dry bulk market caught its breath last week after the rapid rise over the previous weeks. There was a stand off between the owners trying to push the rates to the next level while charterers exercised caution, anticipating the market would settle and correct itself. Towards the end of the week, it felt charterers had a small win in this respect with FFA values coming off a little and owners becoming open to engaging at last done levels rather than push for an additional 1-2K more on hire rates.

The Atlantic market has stabilised over the past few week and seems to have found the floor in the short term. The exception to this remains the USG which continues to ease. With the Ramadan holiday starting, there’s been a noticeable slowdown in the Indian Ocean with rates easing across the board. 

It was a good week for stem additions in SA, but not so much in other states. There was 280KMT of wheat, 120KMT of canola and 34KMT of barley added to the stem for total weekly additions of 434KMT. SA accounted for 313KMT or 72%. This was made up of 193KMT of wheat added to the SA stem in the past week and 120KMT of canola. Weekly wheat stem additions of 280KMT were the smallest in six weeks.