Nathan Michael, Agfarm Regional Manager SNSW
The weather has stayed unusually hot and dry in Southern NSW for another week. The weekend is due to be particularly hot again, with temperatures across the state exceeding 35 degrees. Overall it is not much of a problem at this time of year, as limited Autumn rainfall simply minimises the need for further weed control. Not such good news for chemical sales, but for growers it is handy for keeping costs down. Grain markets have probably suffered from too much upwards movement too quickly, and given the amount of liquidity over the past month, the bids have come back $5-10/MT. Because of the high cost of feed, especially in Queensland, the margins on stock-on-feed are well and truly negative in many cases. Feed lotters will look to reduce numbers wherever possible. This demand destruction will be a factor, especially for those who are of the view that the market can keep going up indefinitely.
For the limited amount of wheat left unsold in the warehousing system (estimated <15% unsold), we have seen prices retreat by $5-10/MT. There were buyers available that were willing to compete on most grades at values slightly lower than last week, but overall most growers are still reasonably happy with current pricing levels. APW is still around $300/MT PKE, with H2 at a $20-25/MT premium and ASW at a $10-15/MT discount. Exfarm values have been executing mainly into the Newcastle market over the past week at values around $315-320/MT for a varied delivery spread. With fertiliser being available, this allows good freight rates and growers are receiving anywhere from $250-265/MT exfarm for SFW type wheat. It is hard to argue that this is not a decent selling price.
In barley, the continued dry weather in NSW has seen the secondary market of onfarm sheep/cattle feed lotters start to come into the market for a load here and there, this is normally pricing $10-20/MT above the market if they’re wanting to move larger parcels in a quicker way. So, that being said, we are getting values around $255-270/MT exfarm south to north. We were also able to get some F2 done this week at $250/MT exfarm in far western areas. New crop values have dipped for now, back to around $250-254/MT PKE Track, this will give most over $200/MT site for F1 barley, +$15/MT for malt. With barley prices on old crop sitting where they are we think there will be more acres planted this year, but until we see meaningful rain on the radar these prices should remain.
Canola is like a yo-yo lately, everyday being led from overseas futures it is up $3-5/MT then down $3-5/MT. In the past few weeks it has fluctuated in a range of around $15-20/MT. There is still some unsold stock within the system and some low oil out on-farm, however as time goes on I don’t think it will take too much of a gain to bring sellers to the table. This week it has traded in a range of $505-512/MT PKE Track so needless to say we have not sold too many tonnes of canola this week, barring some low oil sales into feed homes.
Prices as at 16th March 2018