SA Market Update 3/08/2018

Kate Phillips, Agfarm Account Manager SA

With the dry continuing to dominate discussions in the grain sector all eyes continue to monitor weather sites and patterns in the hope that the much-needed rain eventuates here in SA. The BOMs eight-day forecast shows the possibility of falls between 5-20mls for most of the grain growing areas, so let’s hope that this next front doesn’t weaken and pass the state by. We are also beginning to experience warmer days, with the mercury hitting the low twenties over the last few days. This, combined with the strong winds that many areas are also receiving, is leading to even greater need for the crops to get a drink.

On my travels around this week I have been encouraged by the crops I’ve seen. Despite being quite far behind compared to a “typical” year, they are hanging in there. Most crops are showing good colour and little variability, so all that’s really needed is a bit more moisture.

In the markets last week we saw strong increases in both new crop and old crop markets, and this week we have seen bids explode upwards with new crop bids up $20- $30 week on week. These are numbers that three months ago would have had growers locking in quickly, but again the seasonal conditions and risk appetite means that these numbers, while attractive, are only being considered cautiously by many sellers.

New crop APW1 Multigrade has been the biggest upwards mover this week, with buyers bidding Adelaide track $365/mt and Port Lincoln track $348/mt. This is closely followed by F1 Multigrade at $332/mt Adelaide and $328/mt Port Lincoln.

Old Crop APW1 and H2 have seen the biggest upward swing this week with APW1 at $345 Adelaide track, up $35 and H2 up $35 as well at $355/mt. Growers are wondering how much more upside there is to this rise and so seem to be holding off with a “wait and see” attitude. A number of buyers are more than happy to view offers on old crop parcels.
As we gear up to head over the Cleve Field Days let’s hope the rain decides to play the game and provide the state with some good rain fall.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prices as at 2nd August

 

Follow us on social media

CNSW Market Update – 3/08/2018

Alistair Murphy, Agfarm Account Manager CNSW

Further cutting of the NSW and QLD new crop expectations have been made after another dry week has passed, and as a result we’ve seen further strength in grain markets in the range of $8 to $12 per tonne across the board.

Grower sales have really dropped away over the last few weeks, as the relentless drought has any sellers really holding on to what they have in case the dry weather continues into the medium term. While rainfall will be a massive benefit to crops in WA, SA, VIC and Southern NSW, we are really past the point of no return when it comes to an increase in yield potential for the Northern NSW and QLD crop. Despite this, a break in the drought would bring some much needed reprieve for graziers and would allow growers to look towards an opportunistic summer crop if moisture profiles can be replenished enough.

Farm to farm values have really surged this week, with reports of sales being made for spot loads of barley delivered Central West NSW at around $435 to $440. But, Barley sellers are very hard to find and majority of the liquidity in this sector is coming from trade buyers or long haul sellers from VIC and SA.
It really isn’t pretty out there by any means, and our thoughts go out to the rural community as it gets tougher and tougher for people and businesses.

 

Prices as at 2nd August

 

Follow us on social media

SNSW Market Update 3/08/2018

Nathan Michael, Agfarm Account Manager SNSW

Any hopes of achieving average production for this year in any part of NSW are well and truly gone. Crop conditions are varied across the south of the state, with crops north of Parkes probably in the worst shape at the moment, followed by crops west of the Newell Highway. Crop development is also quite varied, with some areas sitting on 0% germination, through to areas with plants out of the ground and green, but still quite immature for this time in the season. These areas will be our critical areas for this season; these are the places that still have the potential to produce grain in decent volume if we get much needed rain over the next 2-3 weeks.

At this point in time, the extent of the drought is largely known by all market participants. A very low NSW production figure has already been factored in and the industry as a whole is turning their attention to VIC, SA and WA, where reasonable production is still likely. Grain is already filtering into NSW from the other states, and this movement will likely continue well into 2019.

Apart from rain, the other big variable is the extent of the QLD and Northern NSW Summer crop, which (once again) is dependent on enough rainfall to justify the plant. Although we do try and keep these reports region specific, the outcome of the NNSW/QLD summer crop plant will have a huge influence on where grain produced in Southern NSW will be flowing over the next 12 months. Weatherwise, Wagga is expected to receive 1-5mm today, with even less expected further west and north. Monday has some rainfall potential as well, but again only for falls between 1-5mm – unfortunately, neither of these events will be significant enough to substantially change the situation.

New Crop wheat bids continued their upwards run to an eye-watering $420/mt PKE for APW1 multi-grade. To put this into perspective, this is $120/mt over what growers would call a “good price” to start selling New Crop grain at this time of year, if you are guaranteed a certain level of production. It is all relative and sellers will need every bit of the price rise to account for the poor yields expected this harvest. Ex-Farm feed grain in general is getting harder and harder to buy and as a result, wheat is trading at $340-$365 XF. We suspect that a lot of the price rises in the New Crop market are being driven by contract washouts, where buyers are trying to find replacement values for grain, but sellers are nowhere to be found.
Old Crop barley prices continue to rise off the back of limited but strong demand from livestock producers sourcing feed. Ex farm values are anywhere from $330-340/mt around the VIC border up to between $370-400/mt in northern Port Kembla zone. Despite these prices, grain volumes coming to market ex farm are limited and will continue to be tightly held until any significant rain eventuates. As for new crop values, forward contracts are being done at around $375-380/mt PKE Track. This is very much unchartered territory for most, and these prices don’t look like they will slowing down anytime soon. A keen eye for feed grains will shift to Sorghum production as we move into spring/summer. Should we get a decent Sorghum crop this season, it will be the main contributing factor to cooling down the current Barley prices, otherwise they should remain firm for the immediate future.

Old & New Crop Canola prices have jumped significantly in the past few weeks, mostly off the back of domestic supply issues. The recent AOF Report estimated this season’s production at just over 2.6MMT, a significant production decline of over 1MMT from last year. Most of this production decline is on the east coast, with the majority of the NSW Canola crop being restricted to the South West Slopes and VIC border areas. Old and new crop markets are both marching towards $600/mt PKE Track, with old crop around $580-585/mt, and new crop sitting just above, at $595-600/mt PKE Track.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prices as at 2nd August

 

Follow us on social media

VIC Market Update – 3/08/2018

Sam Davidson, Agfarm Account Manager VIC

The Victorian markets continued last week’s upwards trend, with both old crop and new crop prices rallying strongly again on the back of the dry conditions. Having driven around a large part of the state the last week, it’s obvious that the yield potential is there, however most areas are needing decent rainfall over the next couple of months to ensure a good finish. The early sown crops are looking better than those sown late, however most crops are still 3-4 weeks behind where they should be for this time of the year.

Grain is continuing to be strongly priced moving north of the border, however with the current dry conditions looking like they won’t break anytime soon, growers are happy to monitor the market and hold onto their unsold stock. Old season barley especially continues to remain in tight supply. We have seen demand from both exporters and domestic consumers continue into the new month, however the trade are reporting that they have not been picking up large amounts of tonnes at these price levels, which are being influenced by the domestic consumers in VIC trying to ensure that the tonnes remain in VIC as opposed to heading north into NSW.

This week we have seen ASW1 del Bendigo at $363/mt, up $33 from last week, while SFW1 delivered Griffith is at $378/mt. F1 delivered Central Vic is at $330/mt, however we are seeing stronger interest for ex farm barley. Canola delivered Footscray is $567/mt with oils and bonifications. Despite these strong movements in price, there has still been very little selling.
New crop barley and wheat prices have rallied $32 and $42 respectively over the last week as the trade try and get some cover heading into the new season. With these price spikes, growers are now asking how much more upside the market has. New crop Canola has not been seeing such large price rallies at the moment, however this can be attributed to the Canola market being more export oriented, rather than the largely domestic-oriented wheat and barley markets.

At this point in time, the general sentiment among growers is that most would be happy to see the prices fall away $10-$15 if they could pick up an inch or two of rain. There is rain on the radar for the next week, however we have seen rain drop off the radar far too often of late. Growers are being buoyed by the 5-10 mm falls that they keep picking up as it’s enough to keep the plants alive, however everyone is hoping for a few decent fronts to come through to set it up for a decent crop – hopefully we see the first of these fronts some through in the next few weeks.

 

 

 

 

 

Prices as at 2nd August

 

Follow us on social media

WA Market Update – 3/08/2018

Reid Seaby, Agfarm Regional Manager WA

Another really positive week out in the growing regions with the latest couple of cold fronts carrying moisture through all parts of the wheatbelt. The ‘north-centric’ weather pattern continued but thankfully this time the southern zone also got some moisture. Most regions recorded between 10 – 25mm, which is helping maintain the good moisture profile. It now feels like the western parts of the Albany and Kwinana zones would welcome some sunshine and as a general comment there isn’t a desperate need for rain in too many places.

Markets continued to hold a firmer tone through the week with futures moving higher on tightening global supplies due to increased production concerns in a number of key growing regions globally, namely the Black Sea and EU. The risk to the downside in the near term remains cowed, particularly now that it seems the risks of the US/China trade war have been fully priced into markets. Old crop cash bids were modestly higher but most of the action was in the new crop markets where bids moved higher. There continues to be strong demand for feed grains.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prices as at 2nd August

 

Follow us on social media

CNSW Market Update – 27/07/2018

Alistair Murphy, Agfarm Account Manager CNSW

Another week has passed with no rain fall recorded in Northern NSW, and with the end of July upon us, it has now become glaringly obvious that much of the Northern NSW crop will be written off this season.

As a result, all eyes are now focused on Port Kembla, Victoria, South Australia and Western Australia, in the hope that exportable surpluses in these areas will help supplement the massive Northern NSW and Southern Queensland consumption markets.

Unsurprisingly, values firmed considerably across most local grain and oilseed markets late in the week, fuelled by strength in international markets and heightened concerns over our winter and summer crop prospects.

Given that we are well into the second half on the year with no substantial rainfall being received in July, growers have resorted to spraying out poorly germinated dry sown crops, with their focus turning toward opportunistic summer cropping, should we receive a decent spring break. As the majority of moisture profiles out there are in pretty ordinary condition, a ‘decent break’ would mean a good 5-6 inches prior to the summer sowing window opening to keep things on track. In the event that the perfect spring rain was received, we would expect a significant amount of acres to be put in, with Dryland Cotton, Sorghum and Corn be the most favoured options.

 

Prices as at 26th July

 

Follow us on social media

SA Market Update 27/07/2018

Kate Phillips, Agfarm Account Manager SA

The high winds have continued across many parts of SA this week, but thankfully temperatures have warmed and the frosts that parts of SA experienced last week haven’t occurred again this week. Damage from the winds is varied across SA. We have seen evidence of wind damage in some of the sandier areas of the state, whereas in other areas where it truly blew “its guts out”, there has been less damage experienced than could have been expected.

The state did see some rainfall during the week with the Murray Mallee through to the South East and Riverland receiving around 7-15mls. The eight-day BOM forecast shows another cold front sitting off the southern end of SA, which will hopefully bring falls of 5-20mls and keep things ticking over nicely.

We are starting to see some large variations in crop growth and yield potential across SA as the season progresses. Crop conditions are currently ranging anywhere from a rating of 1.5 (very poor to poor) on the Agfarm crop condition rating scale to well within the mid 3’s range (average). Generally, the feeling throughout most areas is that the crop is at least three to four weeks behind when compared to an average year.

This week I attended a couple of grower breakfast/crop walk events that Platinum Rural Murraylands ran at Younghusband and Sherlock. Both days were well attended and it was great to share a bite to eat and a chat with the growers. Unsurprisingly, the dry conditions and crop survival continuing to be the biggest concerns for growers in these areas.

The Eyre Peninsular field days are almost upon us as well. Agfarm will be there so if you will be attending please put aside some time in your day to drop by and say hello, and grab a new hat or beanie.

In market news this week, we have watched as buyers strengthen their bids day on day in both the new crop and cold crop markets for grain both on farm and in the system. Buyers are also more than happy to look at all offers with some good selling occurring as a result.

In the new crop 18/19 market we have seen increases of $4-28 for wheat, barley and canola with the APW1 MG bid of $335 being up $28 week on week. In the old crop wheat market, we have seen APW1 strengthen $13 to sit well above $300 at $310 Port Adelaide with the other big movers being H2 Port Adelaide being bid at $320 and F1 barley at a strong $310. We are also seeing old crop Canola bids come back into the fray with growers being able to secure $542, around $40 stronger than the bids we were seeing post-harvest.

 

Prices as at 26th July

 

Follow us on social media

VIC Market Update – 27/07/2018

Sam Davidson, Agfarm Account Manager VIC

Victorian wheat markets soared this week with prices rallying $26-$33/MT for 2017-2018 season stock. Dry conditions throughout the Australian east coast is keeping both the frequency and the volume of offers low from sellers, which in turn is making it tough for traders to buy replacement stock from growers. We are also seeing wheat export demand pick up throughout Victorian ports with 102,000 MT scheduled for August and 85,000MT scheduled for September. Whilst the majority sits on the Geelong stem, all port zones should see a lift in price as exporters attempt to draw in enough supply to meet their sale obligations.

This demand has created a unique situation in VIC. Mills/feedlots based in central and southern NSW are attempting to purchase grain in Northern VIC road and rail depots, and exporters are bidding on sites throughout the central and southern road and rail depots. Basically, two separate markets are tugging at opposite ends of the same supply. Economic rationale dictates that prices should adjust higher to match supply with demand. Depending on traded volumes, we could see further price upside over the short to medium term, but this remains dependant on market liquidity and how the Victorian spring weather outlook develops.

This week we saw SFW1/SFWR delivered to the Western Districts of Victoria gain $26/MT week on week with little volume offered. We saw strong volume of ASW1 trade into central Victorian mills and feedlots at $330 delivered buyer AUG-SEP, but minimal sellers into the Goulburn valley at $348 over the same period. H1 wheat delivered to Melbourne Mills gained $13 week on week however H2 wheat delivered to exporters throughout the Melbourne/Geelong zone managed to outpace H1, gaining $29.

Barley markets were refreshingly stronger week on week after a somewhat flat period over June-July. Whilst demand from feedlotters and mills has tapered off due to high prices relative to wheat, we have seen some export demand lift delivered markets from $305-$310 a week ago to $325-$335 this week. As is to be expected, malt premiums have all but disappeared, however sellers have been happy to let old crop malt barley to go as feed. Old crop – new crop F1 spread currently sits at +$36, indicating continued supply concerns for new crop barley.

Canola markets have demonstrated some resilience with prices not only holding onto recent gains but building week on week. Melbourne, Geelong and Portland track markets have all managed to gain $6-$9 week on week with domestic crushers the predominant buyers. Fear of new season crop failure should see traders continue to scramble for ownership on both forward markets and spot markets. Despite the tough season, canola growers in the Wimmera, Western Districts and Central VIC have remained positive overall. Although a decent rain would reduce some stress and anxiety, most are buoyed by 10-12mm falls keeping both hopes and plants alive for a decent spring finish.

 

Prices as at 26th July

 

Follow us on social media

SNSW Market Update 27/07/2018

Nathan Michael, Agfarm Account Manager SNSW

Another week has gone by and there hasn’t been significant rain in any parts of NSW, and so no improvement in crop conditions. Even though there is no doubt that there are areas in serious trouble and at risk of a complete crop failure, we still need to keep a balanced view when it comes to overall production. There are plenty of areas in the state that still have the potential to produce an average crop if we get good rainfall. Even under a worst case scenario for NSW, there are plans from buyers and consumers to secure tonnage from VIC, SA and now even WA to fill the NSW production gaps. So, given the massive new crop numbers that are currently available ($390 + for APW PKE), the market will sort itself out and the tonnes will flow from further away if need be.

We are starting to see bids of $400 for new crop APW multi-grades in Port Kembla, however it is extremely unlikely that we will see any grain trade at these values. Old crop wheat is still in demand and has edged up around $5 to $330 – $350 XF across the region. Protein is still maintaining a $15-$30 premium to these values and continues to be sought after by flour millers and container packers.

Liquidity in old crop barley markets is lacking, with a lot of delivered demand having switched to wheat. Pricing wise, we are still seeing F1 bids at $320-330/mt Ex VIC Border up to around $350-370/mt Ex Farm in the north of PKE zone. Along with oats, we are still seeing some barley demand from northern and eastern sheep producers who are looking to maintain breeding stock or fatten lambs for market. New crop markets jumped last week with delivered consumer pricing heading to around $310-320/mt del Riverina. Track markets are now hovering around $340-350 in Northern Melb Zone and $360-365 PKE Track.
Old crop Canola markets have been active this week, with feed consumers chasing some supply coverage & crushers looking to secure some old crop to tide them over until new crop deliveries begin. However, these increases have been limited, so this again raises the question of whether or not the cost of carry will be worth the hold. New Crop markets have been a different story, with pricing now around $585-586 PKE Track, but unsurprisingly no sales are being made at this stage.

 

Prices as at 26th July

 

Follow us on social media

WA Market Update – 27/07/2018

Reid Seaby, Agfarm Regional Manager WA

It was a sea of green this week with markets charging higher, led by wheat markets in the US. The US Wheat Quality Council have reported Spring wheat yields are around 13% lower than the 5 year average (38.9 bushels per acre versus 44.7 bushels per acre) which is obviously assisting the bullish tone and hence enabling domestic markets to push higher. All old crop wheat grades were up week on week with H2 faring the best to end $15 higher at $330 FIS Kwinana. But the key mover was 2018-19 wheat in Kwinana which exploded to $336 FIS, up a whopping $24 from last week. Barley bids remain extremely strong with feed in Kwinana over $300 FIS and malt sitting close to $340 FIS.

Another couple of moderate rainfall events gave soil moisture a boost across the state in the past week, with most areas receiving between 10-30mm across the two systems. Pockets in the Albany zone did however miss out and so too did Esperance which means growers will be hoping for a good drink soon. Above average yield prospects are well and truly on the cards in the northern half of the growing zones.

 

Prices as at 26th July

 

Follow us on social media