SNSW Market Update – 27/04/2018

Nathan Michael, Agfarm Account SNSW

The market has somewhat stabilised over the last week. Liquidity has very much slowed down to the point where there is very little grain being traded, except for farmer to farmer sales. The small scale sheep and cattle feed market is starting to represent a reasonable amount of demand in its own right, due to sheep and cattle producers wanting to hold stock for better market prices (even though they are at reasonable levels currently). With some consumers paying well over $320/MT delivered in order to secure their barley and wheat requirements, it still seems to make economic sense to continue feeding these stock, even at these inflated prices. Weather-wise, there has been no rainfall of any substance across the region, leading many farmers to resort to dry sowing canola and grazing wheat. While this is not ideal, those with large cropping programs are in a difficult situation where they need to make a start now in order to have the crop in the ground within the sowing window.

Wheat is only slightly more liquid than barley at present. We estimate that only 10-15% of grain in warehouse (and even this figure may be too high) remains uncommitted and those who still have grain to sell are very reluctant to do so, given the current environment. Exfarm parcels are in high demand, primarily to go into feed homes, at anywhere from $280-300/MT delivered. Prices into the Griffith market zone continue to trend up, with $290-295/MT for delivery in the next two months. Newcastle is a $320/MT minimum, but as high as $328/MT. Even these prices seem to be struggling to extract much in the way of grower selling and it is likely to stay this way until there is some rainfall on the forecast. New crop wheat is very illiquid but is likely to trade at $310-315/MT Port Kembla track should sellers present themselves.

Barley has remained on similar terms over past week with old crop supplies offered up thin on the ground. Demand is not the problem with a lot of small users searching for winter supply in the South West Slopes and everywhere in between. Prices remain around $270-300/MT exfarm dependent on location. New crop prices also held their ground at around the $270-275/MT Port Kembla track level or $270-275/MT delivered Melb/Geel January 2019. It is becoming more apparent as the weeks go by there will be a lot more barley planted this season as it remains too dry in some cases for early plantings of other commodities.

 
 
Canola will have the opposite effect to barley. The drier it remains, especially over the coming two to three weeks, canola plantings will be pushed out of the equation lessening the potential production for 2018/19 season. This should keep a floor under new crop canola prices which are around $530-535/MT Port Kembla track and $525-530/MT Melbourne track currently. Old crop is at relatively the same level, if not slightly behind by $2-5/MT. With remaining unsold system parcels we, like everyone else, are keeping an eye out for that $500/MT site level.

Prices as at 27th April 2018

 

Follow us on social media