Nathan Michael, Agfarm Regional Manager SNSW
At time of writing there is some light rain falling in Wagga, but that is the extent of our entire week’s rainfall. There is due to be up to 20mm over the weekend, but this has been scaled back from double that amount a few days ago. At this time of the year most growers will not be panicking, but will be very welcoming of any moisture to help with the moisture profile for the coming season. Growers who grow oats are starting to sow into very little moisture and many are continuing with their spraying programs. Prices have remained firm over the last week in defiance of falls in the futures markets. We have been pricing barley at $250-260/MT exfarm and wheat at similar levels, so much of the price falls have not translated into significant falls back at the farm. With the opportunity window to delivery grain before sowing getting smaller every day, many have decided to halt sales until June and try to execute after their new crop is in the ground.
Wheat has offered very little sales in the system at the moment. I suspect there will be a little more activity next week as we approach the end of another month. Prices are on par with last week, but given the low volume, it is almost irrelevant. Options into delivered markets are limited, with most buyers having done a good job of getting coverage. The Griffith market has been trading at around $270/MT delivered and this works perfectly for those looking to clean out storages before sowing. This gives local growers around $255-260/MT exfarm, especially if they have their own truck. The Newcastle market is somewhat untested for May/June/July delivery, but I suspect it would be maximum $315/MT at the moment. For many, this later delivery period would lock in an extra $5/MT worth of carry, on top of current prices.
The frantic pace of exfarm barley selling has certainly slowed down. Instead of buyers actively chasing 1,000MT parcels, many are now content with buying 100-200MT parcels instead. This seems to be because of many end users having short term coverage and for the most part the trade seems to have met their obligations. Having said that, there is still demand at $250-265/MT exfarm for barley to the north and east. These price levels are inline with current track prices of around $260-265/MT PKE. We haven’t changed our opinion that later in the year the barley market will get very tight and prices may have some upside. The last few months has probably shown that it doesn’t take much of a price rise to extract sales from growers, especially when storages start to become troublesome and cost pressures start building.
I cannot say much about the current canola market other than we have returned to a market dominated by entirely unmotivated buyers and sellers alike. The bids have remained around $500-510/MT and at these levels, we are finding that only cash pressures are forcing growers to even consider selling. Nothing else to add other than the year-on-year price of $500/MT site will cause all remaining tonnes to hit the market, but we are a long way from $540/MT PKE. So in the short term, not much will change unless export vessels are commissioned or local consumers have to return to the market to buy further coverage.
Prices as at 23rd March 2018