#grains

Indian govt. announced a 10.35% hike in MSP for lentils, millet & paddy to support growers.  

India, Sri lanka & UAE were the top 3 volume consumers of Australian lentils in April. Export of lentils boosted by to 173% y-o-y basis & fall by 6% in m-o-m basis.  

In recent time, Pakistan has emerged as a volume buyer for Australian desi chickpeas. Export of desi chickpeas fall by 62.46% in April m-o-m basis.  

Australian exporters were unable to negotiate parity price for canola seed in Nepal, where it already faces fierce competition from Ukrainian rapeseeds. 

Today, Australian dollar is 0.6786 which is up by 3 cents that is limiting trade this week. 

Again, India has set a stock limit on wheat that will remain in effect until March 31, 2024, to control prices. May eventuate import requirements later part of this year. 

In April, China and Malaysia were the biggest buyers of Australian wheat in the containers followed Taiwan, Vietnam, Thailand, & Indonesia. Containerised wheat export decline by 28% m-o-m basis as per ABS. 

In bulk in vessel wheat business, again China is biggest volume consumers followed by Thailand & Indonesia in April. Export of wheat in bulk fall by 19.32 % m-o-m basis as per ABS 

Heavy rainfall in China’s Henan province during winter harvesting; impacting quality of new wheat crop 2023-24, earlier it was forecasted to 140 MMT as USDA report. 

Australian wheat continues to be more expensive on export parity basis to CIS origin. Domestic trade on wheat seems to now see very limited bids by domestic end users/exporters on back of recent rains in grain growing areas of SNSW/VIC/SA & Southern WA providing some optimism; demand in SE Asia for Australian wheat remains affected due to cheaper CIS grain availability.  

Slow harvest, low availability continues to push Sorghum pricing higher domestically; continued China export demand. 

Australian canola east coast port zones higher by about $15 to $30 this week on back of jump in European markets. However, pressure to remain on pricing given almost 2 mmt carryout expected. 

In India, minimal trade movement for Australian Red lentils (Nipper/Hallmark#1), been advised last week traded for CFR Kolkata – USD 685 pmt levels in bulk in containers. Ongoing strength in Tur has not led to any significant uptick in import demand yet. With strict government directives on stock holding, traders are unwilling to resort to any large volume imports thus keeping business to continue to tick over at sideway pricing values. Our Indication for Nipper/Hallmark #1 – July/Aug – Bulk in Containers – CFR Kolkata – USD 685pmt; CFR Nhava Seva – USD 680pmt; CFR Birganj (Nepal) – USD 725pmt 

Australian Chickpeas is more focused towards just Pakistan market, no demand seen any other destination. Traders attending GPC at Sydney got their share of excitement this week with mkt grapevine suggesting appx. 8-10k mt traded in containers of both 25% def (CFR Karachi – USD 505pmt) and 15% def (CFR Karachi – USD 520 pmt), though we are led to believe that this volume took out the local trader long stocks. Significant currency risk factor for Pak still keeps Australian seller risk appetite in check. Our indication for CFR Karachi – July/Aug – Bulk in container – CHK1 – USD 560; CHKM (15% def) – USD 525; CHKM (25% def) – USD 505; Nipper/Hallmark#1 – USD 695 pmt.       

Nepal, Bangladesh and UAE markets are still relatively quiet, and there is no forthcoming demand for pulses yet.  

Global markets on oilseed complex continue to slide. Australian Canola seed market in Nepal facing competition from Ukranian rapeseed due to aggressive price offers. Our Indication for GM Canola min 44% oil – July/Aug – Bulk in Containers – CFR Birgunj – USD 620 pmt. We haven’t seen any firm queries in last 1 week. 

AUD/USD 0.65 at 6-month low which is supportive for Aussie exports, however falling demand against expected significant northern hemisphere crops and global macro fears keeping a lid on export volumes across grains and pulses. 

On new crop estimates, whilst planting hectares will be similar across all pulse’s crops, however expected yields are estimated lower by various agencies with PIRSA in SA expecting lentils to harvest about 1.73 mt/ha in 23/24 crop vs 2.75 mt/ha in 22/23 crop. (191,600 ha yielding 527,250 mt in 22/23 vs expected 201,400 ha yielding 348,800 mt). We expect this trend to be similar across all Australian states due to threat of El Nino which may threaten our crop prospects this spring. 

Global wheat market found support due to the resurgence of uncertainty surrounding the Ukrainian export corridor & dry weather in US settling into corn and soybean-growing regions. Despite of unchanged dry weather condition still US struggling to compete with Russia who is holding large stocks of cheap wheat. In order regain importer’s attention, lack of demand is causing US wheat price dip below corn.   

Australian growers have been busy crop planting, we see slowdown in export interests. We anticipated firm demand of Wheat from Asia countries but facing competition from cheap Russian wheat. We don’t see any meaningful support for Australian wheat prices in the short term due to the sufficient global wheat supply, cheap and plentiful Russian wheat, and worse economic conditions. 

In Barely market, Australian growers clearly sees that Chinese demand and prospects for new crops are the two clear opportunities. We are keeping an eye on the Chinese tariff review, but it is still unclear whether or not there will be significant changes. New potential upside should new crop prospects suffer due to drier conditions. Due to the threat of El Nino the new crop bids aren’t yet at the point where they would create interest.  

In Sorghum, Australian grower anticipating that Chinese demand is still the dominant factor with the weaker Australian dollar supports prices. 

In India, Australian Red Lentils (Nipper/Hallmark#1) traded at USD 680 pmt levels for CFR Kolkata bulk in containers, sales are trying to be pushed but buyers are unwilling to increase bids. Heard USD 660 pmt levels traded for Nipper/Hallmark#1 CFR Nhava Sheva however with freight differential usually limited to between USD 5-6 pmt between Kolkata and Nhava Sheva, we do not believe there to be many sellers selling steep discounted values into Nhava Sheva. Our Indication for Nipper/Hallmark #1 – July/Aug – Bulk in Containers – CFR Kolkata – USD 692 pmt. 

 In Pakistan, the demand for Australian pulses is waning after a few weeks of aggressive buying. Politico-economic/currency risks keeping most regular Australian sellers restricted for container business for Pak. Small amounts of CHKM containers continue at USD 540 CFR Karachi levels. Our Indications for CFR Karachi – CHK1 – USD 570 pmt; CHKM – USD 540 pmt; KCP 7/8 – USD 970 pmt; Nipper/Hallmark #1 – USD 695 pmt  

Bangladesh and UAE markets are still relatively quiet, and there is no imminent demand for pulses. In Bangladesh, last week heard trade offers for GM Canola min. 44% bulk in containers around USD 645 levels.  

The Nepal pulse market has slowed down for a while. Our Indication for Nipper/Hallmark#1 – Bulk in Containers – CFR Birgunj – USD 725 pmt; CHK1 – USD 600 pmt.  

 Canola seed continues to be quiet for Nepal buyers mainly due to aggressive offers on Ukraine rapeseed where new crop harvest is just 1 month away, hence urgency on emptying storages. Our price indication for GM Canola min. 44% oil – July/Aug – Bulk in containers – CFR Birgunj – USD 640 pmt. 

Container freight ex Australia continues to correct month on month as carriers struggle with filling their vessels with cargo. However, we have noticed major carrier’s reluctance to significantly reduce freight rates to the Indian sub-continent majorly due to  

a) Equipment availability issues in Australia due to low import volumes and  

b) Limited own vessel carriers into ISC reducing competition. 

The announcement of a 60-days extension to the Black Sea grain corridor agreement led to pressurization in global wheat prices & corn followed it for the same reasons. Adding further US corn price in pressure due to the cancellation of 272,000 mt of 22/23 corn to China.  

However, Australian growers had couple of good, seasons & so they are not in urgency to sell what they’re holding, particularly with the chances of an El Nino event increasing price in old & new crop.  

Barley prices have fallen along with wheat & corn, but Australian growers are still hoping for support may come later in the year on the back of China’s tariff review. New crop production is looking shaky because of drier conditions caused by a developing El Nino & hoping to get price support in upcoming months.   

Drier than normal conditions are expected to continue until late May. The dry weather continues to hinder planting progress, with planting rates across Eastern Australia spread between 50-70%. VIC is now 70%+ complete, whilst NSW and SA are lower, around 50%. Grower feedback has been that almost everyone is looking for at least 5-10mm to get crops started.   

Sorghum is currently in low demand in China; trade is offering it for USD 340 levels CFR Tianjin for bulk in containers, but there are no bids.  

No major demand from SEA wheat millers; they have enough wheat on hand to last until July 23. Australian wheat in containers quoted for July/Aug shipments period – ASW-USD 322 pmt ; APW- USD 327 pmt.  

Minimal trade demand for Australian Lentils from India. Been advised by brokers that there are trade offers as low as USD 685 CFR Kolkata bulk in containers with limited buyer interest. Today’s replacement value for Nipper/Hallmark #1 – June/July – Bulk in Containers – CFR Kolkata – USD 695 pmt; CFR Nhava Sheva – USD 690 pmt 

As far as Australian Faba Bean no demand from India. Last I heard trade offers around from the market for Faba Bean at USD 410 seller. Our price Indication CFR Kolkata – USD 420 pmt FAB1 less USD 10 FAB2 – Bulk in Containers – June/July.  

After strong demand & aggressive buying of Australian Desi Chickpeas, Kabauli & Lentils by Pakistan for two weeks. Suddenly demand dipped from the Pakistan market. Our price indications for CFR Karachi – June/July – Bulk in Containers – CHK1 -USD 570 pmt; CHKM – USD 555 pmt; KCP 7/8 mm – USD 980 pmt; Nipper #1 – USD 700 pmt.  

No forthcoming demands coming from Nepal, UAE & Bangladesh. In Bangladesh last week heard a trade offer for Nipper/Hallmark #1 around USD 670-680 levels but weak demand as of now.   

Nepal pulses market is bearish, our price indication for Nipper/Hallmark #1 – June/July – Bulk in Containers – CFR Birgunj – USD 735 pmt.     

Minimal trade demand at present coming for Australian canola seeds from Nepal. Our price indication for GM Canola Min 44% oil – June/July – Bulk in Containers – CFR Birgunj – USD 670 pmt.  

Australian growers are now searching for that next rain event from WA around to parts of eastern Australia, while some areas are very wet in western Victoria.   

USDA report last Friday reduced Australia’s 23/24 wheat production to 29mmt from 39mmt on the impending threat of EL Nino with exports pegged at 21mmt. US wheat production is also forecasted to be one of the lowest at 31mmt. It points to a tighter snd outlook which seemingly has provided a floor to the market. All eyes are on the Black Sea corridor to determine the direction, however, it is broadly expected by trade to be renewed. 

Sowing of winter crops will be almost over in the next 15 days in the eastern Australian states of Qld, NSW, Vic and SA whilst WA farmers slow down planting due to a lack of seed germinating rains across its wheat growing zones. 

With strong El Nino second half of the year, Australia could see a drier and warmer start to winter after three years of wet and unpredictable weather, while India, the world’s second-biggest producer of wheat, rice and sugar, could get below-average rains due to the phenomenon.  

We have not seen any significant demand from SE Asia for containerised wheat. Australia wheat bulk in containers quoted ASW-USD 330 pmt; APW-USD 334; pmt APH2-USD 402 pmt. Australian wheat export demand is very lacklustre, lack of both exporter engagement and grower selling sentiment. 

As of now weak demand in China for Sorghum; Trade offers around USD 340 levels CFR Tianjin for bulk in containers, but no bids against it.

Minimal trade demand for Australian Lentils from India. I have been advised by brokers that there are trade offers of USD 690 CFR Kolkata bulk in containers with limited buyer interest. Export parity from Australia at USD 710 CFR Kolkata – June/July. 

Currently no demand for Australian Faba Beans in India’s market. Indication CFR Kolkata – USD 440 pmt FAB1 less USD 10 FAB2 

Nepal, UAE & Bangladesh continue to be very quiet – no pulses demand forthcoming.  

Pakistan market gone quiet this week after seeing strong demand of Australian desi chickpeas for last two weeks.  Been advised of trade offers at USD 570 levels CFR Karachi in containers – no bids are forthcoming at these levels. Australian Kabulis no demand. 

Seeing some demand for Australian canola seed in Nepal. However, still no parity with buyers expecting USD 655 CFR Birgunj levels; trade offer USD 675 CFR Birgunj. Competition from Ukraine-origin rapeseed keeping bids in check. 

Heavy funds selling on the bourses for the full food, feed and oilseed complex.  

Wheat continues to be hammered on the back of good crop conditions in the US, lower priced offers on new crop wheat from CIS and generally low demand from SEA millers who have covered their requirements up to July,23. Australian wheat in containers into main SEA ports quoted ASW – Low USD 330’s; APW – mid USD 330’s; AH2 – high USD340’s 

Weak demand for Australian Sorghum in China due to a crash in the feed complex prices. Corn sales to China continue to be cancelled by exporters. Upto 800,000 tons purchased by China have been cancelled in recent weeks.  

Trade offers for Australian Sorghum to China USD 355  levels CFR Tianjin for bulk in containers, however limited demand at low USD 340 levels. 

Improving prospects of large grain supplies in the northern hemisphere growing regions is continuing to put a heavy lid on demand and pricing expectations of consumers continue to be heavily discounted to replacement values. 

Australian growers continue to plant the winter crop which contributes to low sales and hence stagnant prices on Australian-origin grain. They continue to hold on to warehoused grain although export demand has dropped significantly with very little new business reported in the last few weeks. 

About 50-60% crop has been planted in the eastern states of Vic/NSW/Qld and about 40% crop planted in WA.