Australia's main wheat exporter is China, which has five main producing regions: Western Australia, New South Wales, South Australia, Victoria and Queensland.
In the past week, some northern traders have abandoned their long positions as production of feed wheat and barley has exceeded expectations in Victoria.
Modest purchases of both grains by feed mills also contributed to the decline, as consumers took a wait-and-see approach to adequate security in the near term and wanted low-quality grains to be put on the market at a discounted price early next year.
Plans to export barley to China and wheat to a number of destinations have minimized declines in southern markets, despite the Australian dollar**.
There is a lack of support in the north
Demand for forage grains from opportunistic breeders has declined in recent weeks due to rains in pastoral areas, prompting some traders to unwind long positions that were built up in anticipation of a very dry summer.
The industry is selling it off;They can't export, they want to get rid of it," said one businessman.
Consumers are also concerned about higher-than-expected wheat yields and low protein levels in the south, including some rainfall-related downgrades as buffer stocks.
While vertically integrated feedlots are expected to continue operating at full capacity next year, smaller businesses are feeling the effects of raising cattle*** as well as wheat and barley***.
People are starting to ask: how long can the number 4 last in front?”
Consumers in southern Queensland typically source feed from Murray and south of Narabury in northern NSW.
The backlog of spot sales of southern grains during the harvest season in the south has also brought some downward pressure to the already abundant market.
We had some people coming home from the south after shipping their harvest from New South Wales and Victoria, and they brought some goods to help cover the costs. ”
The south weighs the rainfall impact
Some paddocks in Victoria, South Australia and southern New South Wales are still too wet to harvest.
The worst affected are Wimmera in southern Victoria and parts of South Australia, with 20-30mm of rain in many places over the past week.
Some of South Australia's wheat and barley crops were wet, but the vast majority of the state's grain harvest was thrown into the trash before the rains.
The storm has brought some sporadic rain to parts of NSW over the past week, but overall, the rain has helped replenish the subsoil and is ideal for corn and sorghum currently in the field.
In Victoria, Rex James Stockfeeds commodity manager Tim Hogarth said growers were pleasantly surprised by yields, but protein yields were lower than expected after more spring rains.
"Even though some growers are fed a bunch of urea, the average average moisture for some crops is still difficult," Mr. Hogarth said. ”
The wheat was tested at very high weights, some close to 80 kilograms per hectolitre, and Mr Hogarth said the harvest in the Goulburn Valley and north was expected to be completed next week.
Growers are restricted in their sales, with large dryland yields of more than 6 tonnes of hectares common, with some growers yielding 7-8 tonnes of hectares.
Hogarth says that because of the wide variety and quantity of commodities to be used, growers are choosing wisely which header commodities to choose.
Growers have been **just to generate cash flow. ”
While Victoria's wheat harvest has not yet fully recovered after the rains of previous weeks, the quality picture is becoming clearer.
Industry sources generally estimate that the state's wheat production is about 50% complete and potentially record-breaking.
About 75% of total wheat revenue is expected to be ASW, including wheat regraded to feed, of which APW accounts for about 20% and durum wheat accounts for 5%.
Conversely, South Australia is expected to have about 60% of its durum wheat and will have more wheat than usual to domestic flour mills** and less wheat than usual to domestic feed markets**, who will look to Victoria for their mills** wheat.
Geocommodities broker Brad Knight said the spread has widened as the wheat quality profile has evolved.
APW ** has declined and the spread between ASW and APW has widened," Mr Knight said.
Now there may be a pile of fodder wheat in Victoria. ”
Riorda Grain Services manager Mark Lewis said the spread between feed wheat and ASW wheat has now reached around $15 tonnes.
While the early Marley region had already been harvested before the rains, the western part of Vic was just beginning to be harvested.
The decline in quantities, which is a sign of germination, has not yet become a common reason for lowering ASW wheat grades, but with less than 9% protein content before rain, protein may be the deciding factor.
The year started with a low protein content. ”