Noodle wheat premium up
The noodle wheat price has moved to an $80/tonne premium to APW, but is unlikely to be sustained.
Meanwhile, growers have taken an enthusiastic approach to the newly released variety Zen.
On June 10, ANW1 was bid at $369/tonne compared with APW1 at $288/tonne ex-Kwinana, according to Profarmer.
Profarmer general manager Nathan Cattle said international demand for WA noodle wheat was about 750,000 tonnes (mostly from Japan and Korea). Including carry-in stocks, growers were likely to have produced enough last harvest to meet that demand, Mr Cattle said.
However, it is a question of who owns the noodle wheat with Mr Cattle's expectation that the majority of noodle wheat is owned by a small number of traders.
“There is probably enough noodle wheat in the market but the question is who owns it,” he said.
“It is likely a lot of the ANW wheat in WA is owned by one or two traders, with a little still owned by growers. Hence we suggest the rally is more likely due to a miss allocation of the noodle wheat that exists, rather than it not existing.
“For example, if one or two buyers own the majority of ANW in WA, they can essentially name their price if other traders need it to fill existing commitments, or use the bid to scare off other traders from entering the market"
“Ultimately growers want more competition for their product at the farm gate, hence I'm not convinced anomalies in the market such as this are good for growers in the long term.”
Mr Cattle said typically when there were large premiums the market tended to work itself out with the users making adjustments accordingly.
“The current premium is unlikely to be sustainable in the longer term,” he said.
“It's good for growers still holding ANW wheat today but what about the majority of noodle wheat growers who have grown crops this year? If one or two traders hold the others to ransom, it is less likely those other traders will be back bidding for grain in the market next year.
“The reason the premium exists is because it is not trading so it becomes an artificial number.
“We have seen high premiums in the past, in 2010/11 the premium over APW got to above $150/t, and they have not been sustained.
“This is why we aim to lift transparency, so growers reap the benefits of an efficient market including more competition at the farmgate.”
He said if growers did have some unsold noodle wheat in warehouse, an option was to put it up on Clear Grain Exchange. This would allow them to expose this grain to the entire market of buyers, not just the dominant few
“This would enable a buyer that has appetite for ANW1 to see it is available. If the buyers don’t know it’s out there at some point they will likely leave the market,” he said.
InterGrain WA territory manager Kynan Jackson estimates about 100,000ha of the new Zen noodle wheat variety has been planted by WA farmers this year (in addition to other varieties).
He said the vast majority of the 160 growers who grew small amounts of this variety last year opted to retain their seed for planting in 2016.
The 2015 season, which was characterised by a dry finish, yielded good results from this variety. Farmers in Kojonup, Toodyay and Williams reported yields of about 4t/ha, Mr Jackson said. As expected, the Zen had a good grain size, on average exceeding Mace and Calingiri.
Mr Jackson said the other new noodle variety released by InterGrain in 2014, Supreme, had less of an uptake for the 2016 season. Although Supreme produces the highest-quality noodle grain, it is a short season variety and the yield is not as high as that of Zen.
Meanwhile, another new noodle variety to be released by InterGrain in spring, is being trialled around WA.
“Known as IGW8027, so far it is looking fantastic, offering high yields, improved disease resistance, a mid-season maturity and has excellent udon noodle quality characteristics for growers,” Mr Jackson said.
He said the new noodle variety was set to become the WA noodle yield benchmark, with trial yields, consistently exceeding Mace by 5 to 6 per cent.
“The variety has been a stand-out performer within InterGrain breeding trials over the last few years. We expect it to be very popular when released and seed will be available to growers for planting in 2017,” he said.
Mr Jackson said the combination of good performance from new noodle wheat varieties and an excellent start to the season meant farmers across most of the Wheatbelt were feeling optimistic.
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