Nathan Michael, Agfarm Regional Manager SNSW
We have had another week with largely no rainfall. Although, this is not the worst result as it decreases the need for constant spraying of summer grasses. The demand for wheat and barley remain strong to the east and the north, plus whilst backloads are still available for carriers, freight rates will remain “reasonable”. In general, there has been price rises of up to $5/MT in the system and also on delivered markets. This has enticed some grower selling, as targets are surpassed and exfarm grain looks to move before cropping commences. Given the strong market movements of recent weeks, we get the feeling that any little justification will be used to try and pull prices back over the short term, whether that be because we get some Autumn rain, futures move backwards or simply, that buyers get their immediate requirements covered off.
The strong demand for SFW wheat into the Newcastle Zone has surprisingly reduced the spread on APW to zero. Grain has been moving to the Newcastle zone for various delivery periods at anywhere from $310-320/MT delivered. This has been giving farmers up to an hour south of Wagga $255/MT exfarm and up to $265/MT for those closer to the market. For many this is well within their target selling zones and represents a good premium on harvest values, particularly for weather damaged grain. In the system, buyers have been keen to own all grades, but especially protein over the last week. H2 has traded at levels around $325-330/MT PKE, and APH2 has traded as high as $350/MT PKE. Much of the system stock in our region has been vastly depleted and attention has largely turned to exfarm parcels. New crop pricing has crept higher to $300-305/MT PKE, so that is starting to get attractive to growers who are able to secure $250-260/MT site for the APW on their multi-grades. At this level we may see some people be willing to sell some new crop wheat even before sowing commences.
On-farm sales of barley have slowed the past week; with a lot of business done on this front over the past month, most growers have got a delivery/pickup program sorted for Feb/Mar/first-half of April that fits in prior to sowing. Now programs are closing in on delivery periods that will push into sowing, which may cause a slowdown in sales. Also we have noticed the northern markets of Queensland and northern NSW have also softened off the back of rain. Two weeks ago they were pricing around $335/MT delivered Downs (QLD), whilst in the back end of this week it is closer to $325-330/MT delivered Downs (QLD). Even though barley stocks are tight, this may stick around for a few weeks.
Canola has steadied the past week and is probably even slightly weaker in the back end of this week. We have still been seeing values $520/MT PKE track or slightly better. It seems the halting of the rise has also halted any potential sellers coming to market. We will continue to monitor the market closely, with any further kicks probably being an opportunity to complete sales of 17/18 season. New crop numbers are steady week on week sitting around $520-525/MT PKE Track, probably not worth taking on production risk at this pricing level, so we’re taking just a sit and see approach at present.
Prices as at 9th March 2018