SA Market Update 16/08/2019

Kate Phillips SA Regional Manager

2.5 minute read

I have been lucky enough to spend the majority of this week traveling through the Eyre Peninsula checking on crops and visiting CRT and Platinum Ag stores in the area. Crops in the lower Eyre Peninsula are progressing well and the Upper Eyre Peninsular area around the Kyancutta to Kimba are hanging in there. This area will need a drink in the next couple of weeks or things may start to go backwards quickly.

Last week’s rain event across the majority of the state topped up moisture profiles for many areas along with topping up rainwater tanks. Areas from the Lower Eyre Peninsula, Yorke Peninsula, Murraylands and South East all recorded weekly falls in excess of 30mm. Those in the Riverland, Upper Mid North and Upper Eyre Peninsula sadly weren’t as lucky but did receive enough to keep them ticking along until we hopefully see the next rain event within the next 8 days.

Markets are still a bit of a mixed bag. Old crop numbers are back $5-10/MT for both wheat and barley with new crop singing a similar tune. Growers remain relatively quiet even on the back of the recent rainfall. The BoM forecast for the next few months and last year’s season is still at the front of many minds. As the season starts to sure up this will change as both growers and buyers step up to secure forward sales prior to harvest which will be here before we know it.

Pictured: Crops in Kyancutta in need of a drink but looking good.

Prices as at 15th August

* View of current market pricing. Does not represent current Agfarm bids.

 

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SA Market Update 09/08/2019

Kate Phillips SA Regional Manager

2.5 minute read

This week has seen me on the road from the Murraylands through to the Riverland. All in all, it is looking smart and the continued small rainfall events are keeping things fresh and the sub soil moisture at positive levels. The closer to the Mildura area you get the tougher conditions become and the need for a good drink becomes more evident. There are still some good-looking well established crops to be found that are tillering nicely. If the rain falls at regular intervals from now through to the end of September, the area may well throw a very nice crop as you can certainly see the potential. The later part of the week has seen the wind pick up across the state and areas get hit with severe weather warnings for destructive winds. I can attest to this as I very well nearly got blown away while out doing crop tours.

Marketing wise we are just starting to see some small moves into new crop contracting. With APW1 multigrade sitting just north of $300/MT Port Adelaide, a few have decided they are comfortable to recommence locking away. The story from previous weeks continues though, with the past harvest still front of mind for many and the potentially dry few months a niggling concern. Buyers also continue to be relatively quiet.

Bids have pretty much slid sideways, week on week. We have seen some small rises in the last day to see old crop wheat and barley continue their run north of $305/MT and new crop wheat remaining over the $300/MT mark. New crop barley also gained some strength to sit at $271/MT Port Adelaide. Port Lincoln zone bids have followed suit with both new crop wheat and barley gaining some small strength. It will be good to get back over to the Eyre next week to see how the crop has progressed in the last month.

Pictured: Canola coming out in flower between Tailem Bend and Wynaka in SA.

Prices as at 8th August

* View of current market pricing. Does not represent current Agfarm bids.

 

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SA Market Update 02/08/2019

Kate Phillips SA Regional Manager

2.5 minute read

Chilly mornings are the norm at the moment, but you can feel that spring is on the way. Dawn is breaking just that little bit earlier and I’m not stumbling around in the dark feeding animals as early in the evenings. As the days become longer and the weather starts to warm, we will no doubt see crops really boost along.

Current sub soil moisture levels are stable and although some areas could use a top up, most growers are happy with where things are currently. The BoM reports of a drier couple of months on the horizon along with the knowledge that SA does occasionally throw warm August and September days into the mix still has many taking a cautious wait and see approach.

Crop growth is coming along nicely. There is some variance around the state but the majority of this has come from when the crop was sown rather than anything else. There are reports of some crops starting to come into head and we are all starting to see a tinge of yellow in paddocks as canola starts to flower.

With many in the industry attending the AGIC conference in Melbourne this week markets have been a little quieter. Both new and old crop pricing has moved into this week sideways to slightly stronger. New crop Port Adelaide APW1 is at the magic $300/MT with Port Lincoln sitting just south at $293/MT. We are still seeing some demand for stock feed with farmers needing cover for a few more months yet. Delivered bids for both new and old crop tonnes are also fairly steady, with 2018/19 ASW1 Del Murray Bridge at $313/MT and 2019/20 at $284/MT.

Prices as at 1st August

* View of current market pricing. Does not represent current Agfarm bids.

 

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SA Market Update 26/07/2019

Kate Phillips SA Regional Manager

2.5 minute read

There is a lot of time between now and harvest, but can I just say how great the state is looking at the moment! I’m hard pressed to find an area that isn’t a carpet of green with well-established crops, regular showers and damp sub soil keeping things ticking along. Compared to this time last year the season is shaping up nicely.

The BoM does continue to show a dry and warm spring though and this has kept forward selling to a minimum with last year’s tough conditions still fresh in many minds. If the new crop pricing really kicks along, we may see this change.

Weather, for the most part, is doing the right thing by South Australia. We are seeing regular showers which is keeping sub soil moisture damp to wet in many areas. The Upper North, border areas north of Loxton and parts of the Murray Mallee could all use a good drink to bring levels up to other regions in SA. We are seeing some spraying take place across the state and continued top ups of urea.

Markets have been relativity flat week on week with little action to spur growers into locking away new crop tonnes. Both growers and buyers have been happy to sit back and watch the season unfold with new crop pricing continuing to sit south of the $300/MT mark. Spreads are being offered at both floating and fixed with fixed spreads at around H1 +$18/MT through to Fed1 at -$70/MT. Old crop pricing has eased off to again be sitting at around $300/MT for both wheat and barley. The domestic market continues to see sales into dairy and sheep feed.

 

Pictured: sea of green at Cooke Plains

Prices as at 25th July

* View of current market pricing. Does not represent current Agfarm bids.

 

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SA Market Update 19/07/2019

Kate Phillips SA Regional Manager

2.5 minute read

I drove through SA’s northern cropping belt a few weeks ago and crops looked very good in the main. Going back to Sunday 23rd June…it was ridiculously cold for a camping I can tell you! I spoke today with agronomists from the Eyre Peninsula and Loxton, both are happy with crop progress at this time.

Urea supplies have been problematic from Portland and Port Lincoln for the last two weeks, but the rural merchandise teams tell me that in last 48hrs supply is back on which is great. EP growers have great soil moisture levels with more rain forecast next week, so the two urea boats are very welcome!

The Loxton area is average to good while Allawoona is having a great time with multiple 30mm soaking rains. Others in the area have been getting rain but more annoying and misty than useful rainfall. However, at this time there is enough moisture to keep things moving along in a positive direction – enough that growers here are spraying for smut in barley. Something not done last year!

Prices as at 19th July

* View of current market pricing. Does not represent current Agfarm bids.

 

 

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SA Market Update 12/07/2019

Kate Phillips SA Regional Manager

2.5 minute read

High winds and chilly conditions have hit South Australia over the past 48 hours. Its brought with it showers which have been well received even if they blew through the state sideways. Wind gusts Wednesday night were in excess of 100km an hour and brought with it some damage with trees down and a semi on the freeway blown over. The weather is expected to remain for the next few days as the state is visited by three polar pulses.

This week I’ve been on the road through the Murraylands and into the eastern parts of the south east. Crops are looking good with a carpet of soft green in most areas. Its lovely to be taking photos of areas that only a few months ago were dust bowls. The variation in crop progression seems to be from seeding timing more so than crops struggling. The rain has certainly added to the sub soil moisture levels which have been lacking and while this has certainly improved positivity, the possible drier than average spring is staying front of mind for some.

In marketing news, it’s been a week where buyers have stepped further away from the old crop market. Most are now POA for old crop bids and those who do have published bids are back $5-16/MT for barley and wheat. New crop multigrade bids have seen some interest from growers as confidence in the season’s possibilities grow. APW1 multigrade is back sitting sub $300/MT after briefly poking its nose over the $300/MT trigger mark earlier in the week. At this stage of the game, wheat spreads Port Adelaide range from +$20/MT for H1 through to -$70/MT for FED1. Feed barley spreads are hovering around -$5 to -$20/MT.

 

Pictured: Crops around Lameroo at different stages of development, but in general, all is looking good!

 

Prices as at 11th July

* View of current market pricing. Does not represent current Agfarm bids.

 

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SA Market Update 05/07/2019

Kate Phillips SA Regional Manager

2.5 minute read

The great state was hit by a couple of warmer than average winter days last week and you could almost hear the crops jumping out of the ground. The cooler temps are back again though along with some small rainfall across the state. The recent rain has ensured that, while there is still a long way to go, the crops are in a much better position than this time last year.

While the rainfall has been very well received and grower confidence is on the rise, there is still an air of caution about. Growers have seen the BOM reports showing a high probability of a dryer August and September and last year is still very fresh in most minds. This caution is noticeable in the lack of new crop forward selling. While price is sub the “historical” $300/MT trigger point, the weather is the main culprit in caution when planning marketing mix and risk management.

In marketing news, we are seeing a sea of red. Both the old and new crop markets are softer across the board with most old crop bids now being POA. South Australian new crop is starting to close the gap on Black Sea values globally but still has work to do. We are also starting to see the sheep feed demand is starting to fall away.

School holidays are upon us again, so I wish all the families out there a safe and happy holidays!

 

Pictured: Most crops looking good on a trip from Callington – Mannum – Mantung – Sandlewood – Karoonda.

 

Prices as at 4th July

* View of current market pricing. Does not represent current Agfarm bids.

 

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The Banking Royal Commission and Agriculture


5 minute read

The Banking Royal Commission and Agriculture

Late last year, Agfarm published an article looking at the Agricultural lending landscape. This was written as the Banking Royal Commission was concluding and as we awaited the findings and recommendations. In this article we will look at these findings and the impact on both the rural and regional lending landscapes, particularly in the agricultural sector.

The final report handed down by the Royal Commission contained four main observations. These were;
1. The connection between conduct and reward
2. The asymmetry of power and information between financial services entities and their customers
3. The effect of conflicts between duty and interest
4. Holding entities to account

What do each of these findings mean?

As a summary, the royal commission found that in most cases poor behaviour shown by those in breach of the above-mentioned points was driven by the desire for profit for both the entity and individual (either personally profiting or their business’s bottom line profiting). The fall out from this was the customer and the customers best needs were not always a priority. Lines sometimes became blurred when those, whom a customer should have been able to trust, became both sellers and advisors. At times, customers were pushed into products based on profit for the financial business or incentive to the individual, not what was best for the customer.

The information flow, or lack of it, as detailed in point two showed that in many instances consumers were advised or driven towards products and offerings with little clarity around the finite detail of the products. The final report mentions “There was a marked imbalance of power and knowledge between those providing the product or service and those acquiring it.”

Many consumers came to use a particular banking product by way of a third party such as a broker, advisor or planner. Again, the report findings state in many cases the third party presented financial products to the consumer based on kick backs or incentives and not the best financial interests of the consumer. This was elegantly described in the final report as “An intermediary who seeks to ‘stand in more than one canoe’ cannot. Duty (to client) and (self) interest pull in opposite directions”.

Finally, point four found when those in the financial services sector did break the law and this was discovered, they were not properly held to account. In most cases the financial institution or individual was made to repay compensation and admit to their wrong doing by way of a press release. Again, in most cases, this compensation was a small percentage of the profits that would have been ultimately received.

How do these outcomes play out for those in the farming sector with regard to farm lending?

Farmers were long term campaigners for the Royal Commission and for years we have been witness to stories of farmers losing long held generational properties. It was therefore positive to see five days of public hearings specifically allocated to agricultural lending. The major outcomes from this were:

– Default interest should not be charged on loans secured by agricultural land in areas that have been declared affected by drought or other natural disaster
– Establish a national scheme for farm debt mediation and that mediation should occur as soon as possible after a loan becomes distressed and not as a final measure as has been the case in the past
– A separation of duties and conflict of interest by land valuation being undertaken by someone outside of the organisation with which the loan is held
– Ensure distressed agricultural loans are managed by experienced agricultural bankers and to recognise the appointment of receivers on a farm loan as a last resort

If these outcomes are implemented, they should go some of the way to rebuilding the long-held relationships and trust between a farmer and their banker. The government has already endorsed some of the recommendations such as the Farm Debt Mediation Scheme and agri banking specialists managing distressed farm loans.

What will change post the Royal Commission?

The findings and subsequent implementation of these findings will drive a strengthening in the industry and a more robust lending environment. However, as banks take the findings on board and revamp their practices, it is expected farmers will see small delays in approval when applying for loan and overdraft extensions. Farmers’ are also looking at alternative lending methods provided by the agri sector itself to replace, supplement and/or support the financial products portfolios of farmers.

Agfarm Accelerate is one of these products. Offered by Agfarm through CRT Rural Merchandisers, Agfarm Accelerate is a line of credit to purchase all your major crop inputs, such as agchem, seed, fertiliser, fuel, crop insurance, water and land lease payments. The credit is secured against your future crop production and repaid post-harvest improving cashflow throughout the growing season. For more information on Agfarm Accelerate and how it can assist you, call your local Regional Manager on the details below or visit agfarm.com.au/finance.

Information and quotes in this article have been sourced from Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry Volume 1. https://www.royalcommission.gov.au/sites/default/files/2019-02/fsrc-volume-1-final-report.pdf

 

Reid Seaby
WA Regional Manager | 0439 625 853

Kate Phillips
SA Regional Manager | 0438 128 472

Anthony Hall
QLD & NSW Regional Manager | 0400 873 777

James Ryssenbeek
VIC Regional Manager | 0447 743 556

 

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SA Market Update 28/06/2019

Kate Phillips SA Regional Manager

2.5 minute read

Beautiful winter days have presented themselves this week across the great state. Wednesday hit a high of 21 and it was nice to de-layer after a few very chilly days last week, with frosts hitting many parts of the state.

While it has been cold, there has been little to no rain over the past seven days and follow up rains would be well received. The BoM is showing some good possible rainfall over the proceeding four days with most growing areas of South Australia hopefully receiving 5-15mm. The long-range forecast is for a drier than normal July/August period and with last year’s dry still front of mind for many, regular falls would assist with the continued positivity in the season’s possibilities.

For the most part, emerging crops are looking fabulous, and I am having to hunt to find those that are struggling. While there are some crops a couple of weeks behind others, this is predominantly due to when they were sown.
It is lovely to be able to view crops on paddocks that a few months ago were dust bowls resembling a moon scape. It’s too early to know what the season will give us, but for the moment, it’s pleasing to put on the optimistic boots and see the potential in the season.

New crop markets remained relatively unchanged week on week with commodities sliding into this week with only small north/south movements. Lack of interest in new crop bids continue with only small pockets of selling into the forward markets from those who have the confidence to lock away on the back of a tough season.

Those who held old crop wheat through a tumultuous few months of downward pricing have, over the past few weeks, finally been able to realise pricing that is more reflective of expectations with Port Adelaide zone APW1 at $326/MT, AUH2 at $327/MT and H1 $346/MT.

Those who are still seeking feed barley to feed sheep are finding pricing is remaining relatively steady with offers in the market place around the $360/MT delivered mid north. Feel free to contact me if you have feed requirements.

 
 

Prices as at 27th June

* View of current market pricing. Does not represent current Agfarm bids.

 

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SA Market Update 21/06/2019

Kate Phillips SA Regional Manager

2 minute read

Speaking with growers across the state this week and there is a definite lift in both mood and outlook. The recent rainfall has increased soil moisture for many but also brought significant relief to growers in areas that had previously missed out. The ground is already responding well with emerging crops looking good in most areas. We will no doubt start to see growth slow somewhat in the coming weeks as the temperatures drop to chilly winter levels.

The recent rainfall has kept agronomists across the state busy spending time checking crops, looking at post emergent spraying requirements and urea application. The eight-day forecast is showing possible continue rainfall in the 5-10mm range which will help to keep soil moisture levels topped up. Those who are feeling more confident for the coming season have begun to lock away forward contracts on the back of positive new crop pricing.

Week on week there has only been small movements in both new and old crop and markets. The biggest swings have been in the new crop canola bids with both Adelaide and Lincoln track numbers strengthening by $14/MT and $12/MT respectively. Those who do have canola in their rotation this year may well look to hold out for a stronger number basis the reduction in hectares state wide.

The green pick is allowing those feeding sheep to finally graze some of their area. However, there are still many who will continue feeding well into the year keeping stock feed pricing buoyant with pricing steady at around $360/MT for feed barley into mid north homes.

Keep warm and have a great week.

 

Pictured: Crops coming through north of Roseworthy and west of Auburn.

 

Prices as at 20th June

* View of current market pricing. Does not represent current Agfarm bids.

 

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