Matthew Noonan, Agfarm Account Manager SNSW
This week has been somewhat slower on cash selling, but there has been active buying interest for particular wheat grades in the track. A potential lack of barley in the system may also lead to some feedlots around Southern NSW & the Central West changing over to SFW1/ASW1 wheat come autumn. The slide on canola has continued, but lower production in the region has meant that Port Kembla Track values haven’t dropped near as much as our southern cousins. Weather conditions have been mild for most of the week, but there are four days of continued high 30’s/low 40’s heat forecast to roll into the weekend. Most spraying from the summer rains is up to date, with moisture conservation for the 2018/19 season being a priority.
As mentioned, wheat PKE track values moved higher for most grades over the past 7-10 days, with markets likely up around $8-12/MT over this period. APW1 was reasonably firm last week and early this week, sitting around $293-298/MT PKE track level. It may see a steadier ascension now though, due to either the January ASX contract finishing up this week or because buyers are close to meeting their track transfers to consumers. H2 also followed suit with it trading at a peak of around $310-312/MT PKE Track. As we sit right now we are probably $10-15/MT off the harvest highs from late November/early December. However, if the AUD declines a little and good demand continues then there may be opportunities where we see a few more dollars yet. Feed markets have continued to remain steady to slightly firmer into the Griffith market zone (around $250-254/MT January-March delivery) and up into Queensland (heading towards $330/MT delivered, but not quite there yet).
The last week has seen some good barley trades with $250/MT exfarm achieved in some Western Riverina locations. All be it for a March-April pickup, but nonetheless a really good value considering delivered feedlot markets have been around $255-259/MT Yanco January-March, Jindalee at $260-263/MT January-March, and Bathurst/Blayney at $265-270/MT February-March. With some feedlots potentially switching over to feed wheat in autumn, this may make selling barley now ahead of wheat a better value option.
Oilseed markets have seen another down week, while CBOT soybeans and ICE canola didn’t lose a lot of value. Most of the losses shown in our physical markets came from European MATIF futures, with it losing around $10/MT AUD value for the week. We are hopefully somewhere near the bottom of the pricing cycle for canola and from here who knows where it goes. For the next few months values may remain fairly steady to slightly weak, but major moves (in either direction) might not come until the middle-to-back end of the year. Deferred sales programs may be useful for canola given these uncertainties.
Prices as at Friday 19th January 2018