Matthew Noonan, Agfarm Account Manager SNSW
The majority of growers north and west of Wagga Wagga have either finished harvest this week or only have small amounts of stubborn crop remaining. Surprisingly, the unharvested crop in these areas is primarily made up of canola which was to be direct-headed, rather than windrowed, and refused to ripen given the week’s rain and humidity. There remains anywhere from 20-50% of wheat crops unharvested around the South West Slopes and south of Wagga Wagga, however it is likely many of these may now suffer falling number problems. This is hardly positive news, however the relatively small total size of the crop could mean the strong domestic feed demand will continue to provide a home for any downgraded grain. This in turn may prevent major price falls.
Lower grades of wheat have continued to firm in price and close the gap to protein. ASW has traded as $290/MT Port Kembla track and APW as high as $310/MT, although these prices are at the higher end of the scale and for the most part at good rail sites. The protein market softened due to buyers purchasing at their bids, rather than aggressively competing for grain. As a result, prices have fallen $8-10/MT and some sold grain on the way down. This situation may continue for the short term as selling pressure remains a factor. In the long run, it will be interesting to see if the spread is able to hold, particularly given the limited supply of any new quality protein wheat. It seems the only ones who may avoid falling numbers issues from now on are those with irrigation around Coleambally, whose crops are only now ready to harvest. Any grain which was stored onfarm is unlikely to become available to market until the new year.
Malt barley prices throughout Port Kembla and Melbourne zones have started to push a little higher, now reaching well over $300/MT Port Kembla track. This indicates having a firm offer in the market will be advisable over the next four to eight weeks, but must be monitored closely. F1 prices have remained steady for the most part. Port Kembla track values held at $265-270/MT while domestic homes like Yanco ($245/MT December / $250/MT January) and Jindalee ($255-260/MT) have continued to grab some tonnes. Needless to say the barley balance sheet in NSW should be tight throughout most of 2018.
Canola markets have remained soft, with most domestic crushers feeling a level of comfort with the quantity purchased. Now it will depend on Victorian quality and quantity to determine what influence domestic issues may have on prices. StatsCan raised the Canadian canola harvest 8% higher than past estimates and 1MMT above the average trade expectations, however no international updates on price rises have been received. Looking historically, canola values are sitting between a decile 8 and 9, and there remains very good pricing of $565/MT on the Port Kembla track.
Photoed: Augering grain into onfarm storage at Murrami, NSW
Estimated Harvest Completion as at Friday 8th December 2017
Prices as at Friday 8th December 2017