WITH the 2012-13 sorghum crop in the throes of planting, prices are stronger than ever with the Australian Stock Exchange (ASX) placing the March new crop at $260 to $278 a tonne.
Tight global grain supplies, due to a reduction in the Russian wheat crop and a continuing dry spell in the US, are driving the market for sorghum and on Monday GrainCorp priced the grain at $265/t port equivalent.
GrainCorp spokesperson, Angus Trigg, said much of the market’s movements could be traced back to the performance of overseas corn and feed grain crops.
“What’s happening with the market at the moment is largely down to what’s happening in the US,” Mr Trigg said.
“Corn in the US is affecting the entire sweep of grains here in Australia and a rise in corn will now affect prices here.
“There are lower supplies of feed grain domestically and it also appears that US exporters are holding corn and feed wheat back and waiting for the market to meet them.
“Additionally, some growers are holding back on planting given it’s been quite dry in a lot of growing areas in NSW and Queensland – there is some sorghum going in where there’s subsoil moisture or irrigation but the currently reduced planting area is certainly influencing the high prices we’re seeing.”
Priag Marketing principal Kevin Schwager, Narrabri, said recent weather was playing a contributing role resulting in the market factoring in a weather premium.
“The market is well supported by the Chicago Board of Trade’s corn and wheat futures but it is factoring in the weather,” he said.
“North of Narrabri we need moisture, we haven’t quite seen the hectares we would like go in.
“There has been a reasonable amount planted along the Newell (highway) but moisture is questionable there, and the Liverpool Plains haven’t arrived at the planting window just yet.
Mr Schwager said after 20 to 30 millimetres there should start to be a bit more sowing.
Mr Schwager said current prices were well up on previous year’s.
“Prices are currently the highest we’ve had for the season so far,” he said.
“In the previous two years, prices have peaked at about $250/t.
“At $264/t we are well above where prices have been in the past and are about $25/t to $30/t above prices at this time last year.”
Early NSW Department of Primary Industries (DPI) forecasts estimate 177,200 ha will be planted across the State this year, however DPI district agronomist Rebecca Byrne, Moree, noted plantings may fall short.
“This year sorghum took a bit of area from dryland cotton but soil moisture is still so variable and some people have waited to plant – the majority don’t have enough moisture to plant,” she said.
“It is safe to say that the estimated area may not eventuate despite sorghum being a more reliable crop, especially when cotton prices are so low.”
Last year an estimated 681,826t were harvested from an estimated 163,160ha.