Australian Crop Update – Week 25, 2024

The Australian cash market was sharply lower over the past week with the biggest declines in New South Wales (NSW) where the winter crop is off to a favourable start. Limited new crop selling has been the main catalyst for the declines, but this has also flushed out old crop sellers who are keen to make the most of the old crop premiums. Declines in barley were also less than those seen in wheat.
 
At this stage of the year, it is hard to buy and equally hard to sell. Exporters have been quick to pull bids to realign local markets with overseas values after the late May and early June rains secured germination in Western Australia (WA), South Australia (SA) and VIC. Markets are comforted that the crop has been planted and is mostly germinated, albeit some parts of SA and VIC remain anxious for more rain to consolidate the late, dry start. Declines in Australian wheat is not keeping pace with the falls in global markets which is making local wheat even more expensive into key Asian markets and Middle East markets were exporters were already struggling to make sales against cheaper northern hemisphere competition.
 
On pulses. In the north, growers have taken advantage of good moisture to plant one of the biggest chickpea crops seen for some time while in the south, growers have planted more lentils in less than favourable planting conditions. On Favas, the northern crop is well established while in the south, we are again in watch and wait mode for reports on its progress.

A week of stabilisation in the shipping market. The recent strength in the Atlantic has cooled while in the Pacific, more demand appeared to stem the recent downward pressure. Supra’s in the Pacific are achieving around 15kpd for Pac rounds and slightly more for Aussie. Ultras are able to achieve 16-17kpd depending on the specifics on the requirement. Aussie coastal tonnage showed some resistance this week with larger handies not willing to go below the low 20k's for outbound trips while supras were targeting closer to mid 20k's for same. The exception to the norm was the Panamax which experienced softening throughout the week in both basins. The main reason was a reduction in demand in the Atlantic main loading areas which in turn seeped through to the Pacific which was unable to maintain its levels. Bunkers prices have creeped back up to the low 600's pmt for most major ports in Asia.

The slowdown in shipping stem additions continued this week. There was 193 thousand metric tonne (KMT) of wheat put onto the stem in the week, 60KMT of barley (SA) and 24KMT of canola.