Australian Crop Update – Week 51, 2024

The Australian cash markets were softer in all zones and positions last week in the wind down to the Christmas and New Year break. Local markets progressively quietened through the week as traders exit the offices for the holiday period. Wheat was generally weaker across the east coast with exporters unwilling to chase supplies from the farmer given the difficulty of making overseas sales. East coast values are back to export competitive levels, particularly with AUD weakness, but farmer selling remains slow, so exporters are cautious. Australian wheat is competitive into Southeast Asia at these values. Overall, farmers are well sold on canola and pulses but undersold on wheat.
 
On the production front, late harvest grain deliveries in Western Australia (WA) have exceeded all expectations and warrant further crop increases. As of late in the week, WA deliveries were 19.3 million metric tonne (MMT) including >10.6 MMT of wheat, 5.1MMT of barley and 2.7MMT of canola. Australia’s winter crop production continues to climb, and a big crop is getting bigger. 

There was around 540 thousand metric tonne (KMT) of wheat added to the shipping stem in the past week, lifting the two-week tally to close to 1MMT. South Australia (SA) contributed more than 300KMT to last week’s wheat additions with around 230KMT in WA. Nothing was added in New South Wales (NSW) which further consolidates the slow start to the NSW wheat export program, despite the massive wheat harvest. Barley additions are moving ahead reasonably quickly with the Oct/Jan exports and stem already up to 2.3MMT.
 
As the freight market settles into the holiday period, activity levels have noticeably dried up in both the Atlantic and Pacific as expected.
 
Panamaxes in the Pacific experienced another tough week with rates continuing to slide. The underlying factor remains the imbalance between fresh demand hitting the market compared to the growing tonnage lists. With the low spot levels, it’s not surprising the lack of period fixing being concluded with owners not prepared to lock in any low rates for an extended time. In somewhat of a surprise, the Atlantic did witness a slight improvement in TransAtlantic levels off the back of more minerals demand appearing in the market. However, despite this uptick, we did not see any push on fronthaul trips which instead remained flat throughout the week.
 
The Supramax and Handysize markets have been following a similar path recently which is not expected to change in the short term. There has been no change in the fundamentals, and rates continue to gently ease. Looking forward, it is hard to see any genuine change in market conditions for the foreseeable future as many charterers and owners are taking the opportunity for a well-earned rest before getting ready to tackle 2025.