Grain Harvest Wrap – A look back to the 2020 season

Industry update in 5: Grains

If you’re a grain grower, there’s no doubt this past harvest will have felt quite different previous years. We’ve seen a significant turnaround in seasonal conditions and there have been some major changes in the domestic and international markets. So just how well is grain performing and what does the market look like now?

We asked Grain Merchant Nick McCarthy of Robinson Grain Trading to share his insights in five quick answers.

Q1: How are things going in grain following harvest 2020?

A: Very positive. Most people in agriculture right now seem to have a spring in their step. A lot of commodity prices are high, with plenty of money to be made and there’s positivity in the market with another good start to the year.

We’ve just come out of a record winter cereal crop in NSW, with huge numbers in Victoria and quite a big season for Queensland. So right across the east coast, grain growers will be pretty happy at the moment.

We’ve got so much grain this year and our grain is pricing up really well into the world markets. Aussie products are at a premium, with tighter supplies across the world. Our export numbers are high, especially on wheat and barley, with huge numbers leaving the country on a weekly basis. We’re seeing both bulk vessels and container vessels loading as quickly as they can get the grain into the port right across the country.

It’s a good time to be in grains.

Q2: Where is our grain going? Who’s buying?

A:    We normally send a lot of grain, feed barley in particular, to China but thanks to trade tariffs have had to find some homes for product.  Saudi Arabia really stepped up and purchased a big whack of barley in the past few months. They look to us as our grain tends to price well into the Middle East and it’s pretty competitive. We’re also still stacking up pricewise here in Australia so we’re not having to discount our barley to world prices, in which means there’s plenty of money flowing into the pockets of farmers here.

Q3: How are grain prices and how have they held over the past couple of months?

A: Since November, prices have been bullish, and we’ve seen a rise to back above the $300/tonne for wheat delivered into port, and barley has pushed close to the $250-260/tonne mark. Compare this to our last big season, 2016/2017, when it was $50-$80/tonne less depending on the grain. 

In saying that, prices did come off a touch for a couple of weeks late February to early March with just a little less buying. Growers were also finding it difficult to execute sales into port zones due to the fertiliser shortage. The system in port usually works great – farmers will sell grain and deliver in February and March and have contracts for fertiliser in place so that they can literally go from delivering their grain to another terminal where they load up with fertiliser. But with the world shortage of fertiliser, it was almost impossible to get a timeslot to load in March. Which means people are executing existing contracts until April rather than selling more – which created a bit of stagnation in terms of buying and selling, and softened prices a bit.