CNSW Market Update – 13/07/2018

Alistair Murphy, Agfarm Account Manager CNSW

Downside in international values eased prices anywhere between $2-4/MT this week, although much of the downwards move in US futures hasbeen muted given the condition of northern cropping areas.

We saw a significant amount of dry sowing progress once again last week, although now the next lot of predicted rainfall has disappeared from the radar, dry seeding attempts have stopped as quickly as they started.

It’s getting quite late for sowing now. Even with an excellent finish, crops sown this late are generally expected to experience severe yield penalties in comparison to what we consider to be average yields.
Mid-range rain forecasts still don’t have too much predicted for the next two weeks, and if no rain is received for the rest of July, we could be looking down the barrel of a second year of well below average production in the north.

Concerns from buyers and consumers have been sedated to some extent as crops are faring better in Southern NSW and Victoria, but it’s still concerning considering we’re entering the second poor season with minimal carry out stock left on the balance sheet.

Last week we saw the farm to farm feed market quieten somewhat as graziers eased off to see what the weather would do, but now the expected rainfall has been shelved it appears to have fired back up to levels close to that of two weeks ago.

We saw some good liquidity last week from clients, but now with the weather prediction turning less favourable, the majority of old crop sellers opted to once again withdraw from the market for now.

It’s going to be an interesting year; as the last time we had two bad consecution seasons like this we operated under a single desk which artificially influenced market conditions to an extent. We suspect in a deregulated market space, price movements will be much more erratic this time around.

In the coming season we expect long haul road, rail and boat logistics from VIC and SA continue to play a major role in northern markets, as how cheaply grain can be accessed in these key production areas will limit the amount of upside feed prices will need to do in the North.

 
 
 
 
 

Prices as at 12th July 2018

 
 

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