SNSW Market Update 14/09/2018

Nathan Michael, Agfarm Account Manager SNSW

The Wagga Wagga region was extremely lucky last Thursday, where we scored 26mm from what started out to be a fairly minor rainfall event. Unfortunately, north and west didn’t do nearly as well and received < 5mm in most cases. The difference to the Wagga Wagga crops will be enormous and will buy us three to four weeks of (hopefully) plant growth. The other variable at this time of year is the warm weather. Obviously, warm is good but conversely, hot is damaging in terms of developing crops. West Wyalong and Condobolin have already had 30-degree days this week (or very close to) and it was only the lack of strong winds that prevented an all-out destruction of crops in those areas. Market wise, demand pressure seems to have temporarily reduced. This is largely a result of graziers slowing down their buying due to the prospect of green feed available and plenty of grain being offered for sale through the trade. At this point in time, with seven to eight weeks to go until new crop becomes available in volume, the likelihood is that prices will struggle to increase much from here if the situation continues.

Old crop wheat is available for purchase, although we are certainly seeing buyer resistance at previous price levels. ASW type wheat has been trading at around $415-430/MT exfarm in most cases and protein is still commanding a $10-20/MT premium over these levels. It would seem buyers are no longer able to extract large premiums selling into small consumers so have become a lot more targeted in terms of their buying interest. New crop prices have been artificially buoyed by growers requiring washouts on their 2018/19 contracts and in order to find replacement grain, the prices have had to remain in the vicinity of $460/MT Port Kembla. Condition wise, not a lot has changed other than the prospects of crops from Wagga Wagga south have improved considerably and remain reasonable, while the Western Riverina and Southern Central West continues to struggle.

It seems the supply of barley has continued to reduce again week on week with demand still there mostly from graziers with many major consumers now using wheat as it has been relatively cheaper over the past two to three months. You may still get $440-450/MT exfarm in the northern areas of Port Kembla zone, but it won’t be for large parcels at present. New crop is near the same week on week sitting at around $410-412/MT Port Kembla track, which should it remain around these levels, will give good harvest cashflow.

With some of the best prices we have seen for some years on old crop canola, the few who have carried since harvest remain reluctant sellers with few tonnes coming to market. Demand is there from the chicken feed market and crushers to gain extra cover heading into harvest. New crop is keeping its $10-15/MT spread to old crop up around the $525-628/MT Port Kembla track mark. Again, these are some of the best prices we have seen in some years. Although prices are high, it seems there is a trend to hold back until the crop is off the ground, as the early harvest period in NSW should still see high prices, with pressure predicted to start when Victoria starts rolling.

Prices as at 13th September

 

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