Australian sorghum sowings may not see the rise that officials have expected, undermined by a return of dry weather, and with weaker Chinese demand denting prices too.
Abares, the official Australian crop bureau, has forecast an 8% increase in the country’s sorghum sowings for 2015-16 to a seven-year high of 701,000 hectares.
Prospects for the crop were underpinned by the failure of El Nino to deliver the dryness that many had feared to the eastern areas of Australia where it is grown, and the boost to prices from Chinese imports which in 2014-15 soared nearly to 1.2m tonnes, according to Abares.
In New South Wales, “a significant portion of the sorghum cropping area received good rain before Christmas, creating the impression we might see an increase in sorghum planted area,” Nidera Australia said.
‘No follow-up rains’
However, further rains have not been forthcoming, raising doubts as to whether many farmers will indeed take a gamble on higher sowings.
“The weather gods did not follow through with widespread, follow-up rain, and at best we expect similar sorghum planted hectares to last year” in the state, Nidera Australia said.
And in central areas of Queensland, the top sorghum-growing state, “most growers are looking for a significant [rain]fall to get their planting programme underway.
“The vast majority of the anticipated hectares are still to go in the ground.”
Strong early harvest
The comments come even as the first – and unusually early -cuts from the Queensland crop, in the coastal area, is being harvested, with yields of some 4-5 tonnes per hectare, and strong quality too, with only small amounts of crop being downgraded thanks to excessive screenings.
More than 80% of sorghum crops in the Darling Downs region, just west of Brisbane, are in good or excellent condition, Nidera said.
Last season, the average Australian sorghum yield was 3.45 tonnes per hectare, according to Abares.
However, the strong start to harvest could bode ill for prices which, at Aus$255 a tonne in Brisbane, are already down from Aus$294 a tonne year ago –and this despite weakness in the Australian dollar which supports local values of internationally traded commodities.
The drop in prices has been reflected too in the US, the top sorghum exporter, where officials expect farmers to receive $3.05-3.55 a bushel for their 2015 harvest, down from $4.03 a bushel for their previous crop.
‘Drastically lower appetite’
“Prices are nowhere near harvest time last year, due to the appetite from China being drastically lower,” said Australian grain trader AgVantage.
China’s sorghum imports – boosted by international prices far cheaper than the country’s own values, and with the grain freed from the quotas attached to some alternatives such as corn – have fallen back amid increasing scrutiny by officials.
Indeed, Abares has forecast a slump of 17% in Australian sorghum exports in 2015-16, to 968,000 tonnes.
Even at current reduced prices, “we are not seeing any significant international demand for our sorghum,” Nidera said.
In Brisbane at least, “the market needs a step-up in export enquiry from what we have seen over recent months, to avoid significantly increasing local sorghum stock levels”.
(Source – http://www.agrimoney.com/news/aussie-sorghum-sowing-hopes-ease-amid-rain-price-concerns–9208.html)