SNSW Market Update 16/08/2019

Matthew Noonan, Account Manager Southern NSW

2.5 minute read

Falls over last weekend were on the mark for most areas with 5-10mm’s recorded in the majority of locations through southern NSW. Some of this even reached the northern areas of the Port Kembla zone. This amounts to keeping the top layer somewhat wet in a lot of locations but sub-soil moisture will eventually come into play as September and October will determine how these crops finish.

Wheat markets are similar week on week with small up and down movements day to day. The Griffith market zone has been bid around $355-360/MT for August and September with a gap of $5-10/MT still present between the offers. Some sales are going through on the lower end of this spread. There may be small shorts over the next few months but overall, the old crop market will fluctuate in-line with the new crop hopes and not necessarily just look in our own back yard for pricing signals. Port Kembla track 2019/20 APW1 MG has softened week on week with the USDA WASDE report dropping futures early this week. We’re now sitting at around $360-365/MT week on week which still provides a level to reduce price risk heading into harvest, but for many in southern NSW, more time needs to pass by in this crop’s life for sales to begin.

Barley is still lacking demand overall, but with the current spread to wheat on new crop this may not be the case heading into 2020. It looks as though there is more unsold wheat than barley onfarm through much of NSW, so going into harvest we will be ultra-low on barley carry in stocks. This could keep prices firm through NSW, but with a likely bigger crop year on year, VIC/SA looking at large supplies coming online and not much of an export market for Australian barley, prices could come under pressure as we get into harvest.

New season canola crops around southern NSW are starting to flower and are looking rather good. Some finishing rain to fill pods could mean we have a comfortable supply year for crushers and consumers. However, it will only be just enough overall as carry in stocks will be low. It’s expected prices will hold until harvest, what happens then will be determined by crop yields and size as we head south.

 
 

Pictured: Wheat and canola crops in Murrami NSW.

 

Prices as at 15th August

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

 

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SNSW Market Update 09/08/2019

Matthew Noonan, Account Manager Southern NSW

2.5 minute read

We’ve seen a few small frosts this week through much of the Riverina. This isn’t too much of a worry at this stage, but it will suck some of the much-needed moisture from the ground. There is a change coming later in the week which will hopefully bring 5-10mm. I’ve said it before and I will say it again; southern NSW has some great potential this season, but with big bulky crops comes hungry crops, particularly if we see any heat in next four to eight weeks. Based on this, right now through much of the region we need a minimum 20mm’s to keep up to them.

Wheat markets have remained relatively unchanged to slightly firmer this week. It has been bid around $365-375/MT throughout the week with some offers meeting the bid or at least getting mid-way to the offers which have been from $375-380/MT. The new crop market is very illiquid with strong bids of low $370’s/MT Port Kembla track but next to no interest at this stage. Forward contracts aren’t exactly front of mind for most, as they’re waiting to get through the next little period where frost/heat could be concerns.

Barley on old crop is still very steady. Smalls are trading in the $340-360/MT exfarm level with most delivered homes pricing around the same level. New crop with its current spread to wheat may start to garner some attention for 2020, but for the most part, the bid/offer spread is wide.

Both old and new canola is steady to slightly firmer week on week. This is mostly due to the relatively dry SNSW forecast and the possibility yield prospects could decline. Plus, for now, WA prices don’t allow for canola to make its way around this season.

 

Prices as at 8th August

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

 

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SNSW Market Update 02/08/2019

Matthew Noonan, Account Manager Southern NSW

3 minute read

Much of southern NSW received a good drink of 5-15mm’s last weekend and into Monday. This consolidates current potential through eastern, western and southern Riverina and allows crops to get well into August. Northern Riverina and heading into the central west and northern south west slopes were unfortunately on the lighter end again with 0-5mm’s. This area desperately needs a decent drink in August before we get into September and temperatures start to warm up.

The past week has seen steady pricing for the most part. Old crop has continued to firm slightly with Griffith market zone now pricing around $365-370/MT Aug-Sep delivery. New crop bids on the east coast continue with a cautious sideways to slightly firmer movement looking for some engagement. Over the next four to eight weeks weather in southern NSW will be closely watched to see if this area can hold somewhere near its current potential which will help bring supplies to better levels than last year for NSW as a whole.

Old crop barley has maintained its pricing levels this week. There are still smalls moving from SA/VIC/SNSW into the north and east of NSW for livestock feeders (mostly ewes/lambs). The next few weeks should start to see some livestock removed from paddocks where it looks like good grain/hay potential is present. Some crops in the north will be forfeited to livestock with current crop conditions and seasonal outlook for spring. New crop values have also remained steady to slightly firmer with the same factors as wheat playing out i.e. lack of liquidity and concern over the NSW crop and where production will end up.

New crop canola stayed firm week on week with again similar factors to wheat and barley playing out. Some paddocks around have started to flower but overall canola needs to see production potential hold for the most part everywhere on the east coast. If we were to lose say 10-20% of current potential this would really put pressure on supply into key consumers, and at this stage, WA canola pricing doesn’t particularly work to the east coast ports.

 

Pictured: Frosty morning in Coolamon

Prices as at 2nd August

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

 

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SNSW Market Update 26/07/2019

Matthew Noonan, Account Manager Southern NSW

3 minute read

Crop conditions in the Southern third of NSW are looking good and fingers crossed they can maintain their current potential. The current fortnight’s forecast isn’t overly positive at a time when we will start to see temperatures possibly warm up and crops advance further drawing on moisture reserves. There is cautious optimism around how good things are looking at the moment, but many are commenting that moisture levels in the majority of areas isn’t full. So, to maintain a decent season we need to get at least 60-100% of our average monthly rainfall over August, September and October.

Old crop wheat values have levelled out after the recent dip. There are still some sellers out there with supplies mostly onfarm. The increased activity looks to have been the cause of a drop in values. Consumers took more cover during this time and we could be looking at one (maybe two) more opportunities where gaps might exist in demand between now and new crop. One positive for pricing on both old and new crop, is with the recent lighter rainfall totals and a dry forecast for the next two to three weeks, southern NSW crops are at a cross roads with regards to production, putting some heat under new crop bids. Port Kembla track is now sitting closer to $360/MT or above.

There is limited change on the barley front. We’re still seeing light demand causing values over the past few weeks to fall away. New crop is working similar to wheat in that it’s firmed up to around $295-300/MT, this is also likely from the current forecast and lack of liquidity. The main hope for barley into 2020 is that if it maintains its spread of $30-40/MT under feed wheat values it will wrestle back some demand throughout the east coast.

As per previous reports, old crop canola is done from the consumers point of view with a lack of demand and current better prospects on new crop condition through much of VIC and southern NSW. Like wheat and barley there is a consistent lack of willing sellers on new crop, so prices have edged higher over the past week. This firmness will likely maintain until new crop is just about to come off and sellers start coming to the table.

 
 

Pictured: Good looking crop between Narrandera and Wagga Wagga.

Prices as at 25th July

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

 

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SNSW Market Update 19/07/2019

Matthew Noonan, Account Manager Southern NSW

3 minute read

Most of the rainfall this week fell in the south east of the cropping belt or into the slopes with crop condition in the south looking healthy overall. Hopefully this continues as the months roll on as the southern third of NSW will shoulder the majority of NSW production this season. The state as a whole should produce much more grain than last year but will be concentrated south of the Mid-Western Highway and east of Newell in south eastern areas. Old crop markets have lost some significant dollars recently with a mixture of grower and trade grain coming to the table over the past few weeks.

Old crop wheat has really dipped the last few weeks. This is due to a mixture of grower grain finally sussing out markets and selling tonnes post June 30, and the continued selling of old crop supplies by traders. This has provided good comfort for consumers to push out their cover on old crop just a little closer to new crop where the discounts through Southern NSW have been around $50-60/MT. Old crop Griffith market has retreated to around the $365-370/MT level. As for new crop pricing, the next four to six week’s direction hinges on the crop’s prospects. If we can maintain the current potential in the majority of areas it could eventually soften as we head into harvest. However, should below average rainfall or warmer than normal temperatures bring yield penalties and reduce the crop size, prices will stay firm and may increase over time.

Barley continues to be a hard commodity to move through much of the Riverina with grazier demand not at levels like this time last year. Most major market zones are using a majority of wheat in the ration due to barley price being similar to wheat in most cases. There is still $380-400/MT exfarm sales happening for a load here and there, but overall the market is pegged at around $340-360/MT. New crop is still holding its ground at around $290/MT Port Kembla track which is sitting at a good level in comparison to new crop ASW1 with a discount of $30-40/MT. If this spread is maintained, it may be enough to wrestle back some demand into domestic homes and allow more volume to move come harvest and into 2020.

 
Canola mostly held its pricing levels this week. As per above the southern and eastern parts of NSW will have to shoulder the majority of NSW’s production prospects. As a whole, it looks like the crop will likely be larger than last year by a considerable amount which should make it easier for crushers to accumulate their 2020 requirements. This should spell out to most that canola will be a good harvest sell at current levels providing a sale at a very good decile and also cashflow early in the harvest.

Pictured: Barley, canola and Long Sword wheat north of Barellan NSW.

Prices as at 18th July

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

 

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SNSW Market Update 5/07/2019

Matthew Noonan, Agfarm Account Manager

3.5 minute read

The change that came through on the weekend stayed mostly to areas already looking reasonable and have potential this coming season. Anywhere from 5-20mm’s fell in southern areas and to the south east of the state. Some areas of the southern Central West received a bit more this time around West Wyalong, Condobolin, Parkes etc, which will allow these crops a little reprieve. However, the Central West still remains very tight on moisture reserves and crops are well behind southern ones. The next eight-day forecast shows another 5-10mm’s but unfortunately still has the north and central parts of NSW missing out.

Old crop wheat markets ended last week around their resistance levels with Griffith market zone bid around a $400-405/MT. Since then with some decreases in futures, a small amount of local rain and just a general pull back post some sales from late last week and early this week, the market is closer to a $390-395/MT but lightly offered again. This will likely continue over the coming months. It will be a bit of a see-saw effect ranging in a tight frame of $10-20/MT; when it gets to the low end consumers are keen but grower/trade offers lighten off and when it gradually climbs back to the highs, sales happen again. Looking at new crop (2019/20), prices remain solid historically for this time of year at around $355-360/MT Port Kembla track back slightly week on week. With no real grower engagement on forward physical contracts it’s expected to hold steady, at least until we see engagement. This may be another four to eight weeks away with most likely waiting until spring to see how they are sitting production prospects wise.

There is still a small volume of barley trading into graziers. Consumers barley usage through Southern NSW and Central West is light compared to wheat. This will continue while it holds its value close to wheat values. So, if holding any good volume of barley, selling old crop stocks over the coming months will be crucial with a nearly a $80-100/MT inverse to new crop values. This is not to say if the top two thirds of NSW stay dry that we will see new crop values creep higher, but for now there is significant downside risk if holding old crop stocks.

 
New crop values are sitting around $290-295/MT for F1 Port Kembla track at a $30-40/MT discount to new crop wheat values. If the spread holds for a while, barley may wrestle some demand back into domestic homes if it can hold this current spread which, with a larger acreage planted nationwide than last year, it may keep this level compared to wheat values for the short-medium term future.

Canola has softened again on both old and new crop. This has been more a case of limited demand, but also futures softening this week. There is not much spread from old to new crop so risk of carrying old crop into next year isn’t at the levels of wheat/barley. For now though, the cost of carry needs to be considered. It will likely cost $10-20/MT to carry through another four to five months. It’s expected a change in price is more likely to come from overseas factors such as a smaller soybean crop in the US or hiccups in the Canadian or European crops which have not had any major issues at present.

Pictured: Great to see a sea of green in Culcairn NSW.

Prices as at 4th July

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

 

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SNSW Market Update 28/06/2019

Matthew Noonan, Agfarm Account Manager

3 minute read

Not a lot of rainfall this week but driving around it looks like some locations have good potential. I know it is early, but some cereal crops have the potential of 3+MT/ha. There is a lot of stock on crops which will likely have another three to six weeks before they need to be locked off to allow crops to go through to grain. Old crop markets remain rather steady not really leaning one way or the other at this stage. Tomorrow (Saturday) looks like we may get some rainfall through Southern NSW ranging from 1-5 in the Central West and South West Slopes while parts of the Riverina could look at 10-15mm. The potential gets better heading into Victoria. Unfortunately, the areas that really need it look like they will miss out again.

As above, most old crop domestic wheat markets are rather subdued. Possibly consumers/buyers are waiting for an influx of liquidity as we hit a new financial year next week and beyond. We may see some renewed selling, but with the belief there is limited supply out there it may be short lived. There is three to four months to go until new crop hits the bins so premiums above new crop will remain for the foreseeable future which is currently around $30-60/MT dependent on the grade and market. If the Central West, Northern NSW and Southern QLD remain dry it may be more of a ‘meet somewhere in the middle’ case come harvest. Current levels have seen both track and delivered markets firm up $5-10/MT over the past week starting to close in on some resistance levels. New Crop APW1 multigrade markets have also firmed a few dollars, with Port Kembla track now looking at $360-365/MT. This level will remain until some grower selling starts up, and as this happens you may see some of these markets soften.

Odds and sods of barley are trading around the place, but to find any major demand you either have to look south into Victorian markets like Goulburn Valley and Melb/Geel, or to the very north into feedlots of Liverpool Plains or Southern QLD. Even then there is a small amount of livestock demand which will mean those market zones miss the tonnes.

If holding any old crop barley, the general thought is you need to be proactive in marketing this, as for now there is close to an $80+/MT discount to new crop. Moving into new crop, as long as it holds its current spread to new crop feed wheat values, it may well wrestle some demand back, which will need to be drawn down once it hits the bins. We will definitely hit the end of the year tight on stocks but by our forecasts, these should be replenished and some come Nov/Dec/Jan. Current levels are at $295-300/MT Port Kembla track which is definitely in the 8-9 decile range of historical pricing.

Canola has softened this week by $5-10/MT on both old and new crop with Port Kembla track ranging from a $600-607/MT for old crop and $595-603/MT for new crop. As per previous reports there are less acres, but as long as yields can hold up, we look well positioned to see an average crop for the area. Like most years, at this stage canola looks like it will be a harvest sell, as the costs to carry far outweighs any possible market gains that could be seen from these levels into 2020.

Pictured: Crops looking good in the Riverina

Prices as at 27st June

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

 

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SNSW Market Update 21/06/2019

Matthew Noonan, Agfarm Account Manager

2.5 minute read

It’s been steady across the board this week with no more follow up rain bar maybe 1-2mm’s in southern locations early in the week. Markets both old and new crop are mostly unchanged to maybe slightly firmer. The recent run-up on old crop values has presented selling opportunities for some while the next few months fortunes in southern NSW, Central West, the Riverina and South West Slopes will be determined by local weather as well as pricing structures in the south and west.

Wheat markets have been working a pretty narrow range, starting the week off a little firmer before softening slightly from overseas movements. Local prices are seeing some resistance around the $400/MT delivered Griffith market zone (+/- $5/mt). The next three to four months will be about managing price risk for both consumers and growers (obviously for opposite reasons) with new crop values into domestic markets at a $70-80/MT discount to old crop. New crop, depending on weather in the north or south of Port Kembla zone has been at $350-364/MT Port Kembla track.

Old crop barley is currently priced around evens to wheat, so the main target at present is graziers and consumers requiring some cover. Free on truck F1 prices around the Port Kembla zone have been around the $380-390/MT level. As long as southern NSW keeps looking good, the NSW barley crop should double year on year and this is slightly represented in the current new crop spread from wheat with ASW1 Port Kembla track priced at $325-330/MT while barley is at $295-300/MT leaving us at a $-25/MT to $-35/MT spread. Historically, this (or larger) may increase barley into the ration for some consumers. If it closes up towards wheat values, it’s expected the current limited demand into 2020 will continue.

Canola has firmed on both old and new crop this week with Port Kembla track ranging from a $604-617/MT for old crop and $600-610/MT for new crop.

Driving around north of Wagga Wagga there does seem to be less acres in, and crops west of Newell in the northern portion of Port Kembla zone will likely at this stage be under pressure moisture wise. As long as what is in the ground through SNSW, VIC and SA can achieve somewhere near average yields then supply to consumers/crushers should be sufficient. Unlike cereals, it’s unlikely coastal crushers will be able to bring in WA canola at this stage, as the spread is just not there to execute, so demand will be good for local oilseeds.

Pictured: Misty mornings at Coolamon

Prices as at 21st June

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

 

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SNSW Market Update 14/06/2019

Matthew Noonan, Agfarm Account Manager

2.5 minute read

This past week has seen most locations in southern NSW, Riverina and southern South West Slopes receive 8-20mm’s (more in some cases) with lighter falls moving into the Central West of around 1-5mm’s. With some production certainty creeping in throughout the southern third of NSW smalls of new crop may be looked at with pricing mostly around decile 8 or better.

Old crop wheat markets softened on the back of rains throughout WA, SA and south east Australia over the past week. However, with futures remaining neutral to bullish for now, local and international pricing looks like it will continue its yo-yo affect through to new crop. The Griffith market got down to $370-375/MT delivered earlier in the week but the past few days has pushed higher again searching for a bid towards $385-390/MT plus. The new crop Port Kembla track market is slightly firmer week on week up to $350-355/MT which has two drivers at present. The northern Port Kembla zone still lagging condition wise and the overseas world supply picture is somewhat bearish but getting pushed along by US corn and some dryness in Russia and Canada.

Barley remains rather steady and through much of southern NSW and into the South West Slopes at minimal margin to old crop wheat. As moisture builds in some grazing crops it may provide graziers a chance to reduce feeding requirements, but with current lamb prices and plenty of interest in store lambs, some feeding should continue keeping a base under this part of the barley market. New crop is also steady with Port Kembla track still around $285-290/MT. The spread from wheat (ASW1 spread) is around $40-45/MT which makes wheat a better sell, but the Australian barley crop should be quite decent so current prices going the distance could be seen as ok levels subject to how the rest of the season pans out across the country.

Canola pricing is not doing much at all. Crushers are relatively well covered through to new crop with fair value around $600-613/MT Port Kembla track at present.

New crop remains steady even though VIC and southern NSW received reasonably good growing conditions with recent rains but the underlying feeling is that acres are less year on year and conditions in the Central West are not allowing canola to get going. There was talk of some canola having to get replanted due to crusting over of the soil from heavy rains in May.

Pictured: Canola in Murrami NSW

Prices as at 14th June

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

 

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SNSW Market Update 07/06/2019

Matthew Noonan, Agfarm Account Manager

2.5 minute read

We are definitely right in the middle of weather markets both locally and internationally with local markets dropping around $5-10/MT or more over the last week on the back of forecast rainfall across much of the WA cropping belt and also further rain forecast for SA, VIC and southern NSW. There are no real major falls predicted, but anything above 5mm’s will keep a lot of these regions ticking along nicely for now. There is still a reasonable amount of area in the central and northern parts of NSW that remain dry and will need some drastic change shortly to assist either crops already in the ground or the potential of more plantings. Overseas continues to bring a little uncertainty, mostly from corn in the US with a delay in plantings. Wheat has been following suit in markets but overall should not be too bad with the Black Sea and Europe looking at reasonable crop sizes this year.

The run up in wheat markets was relatively short lived with most domestic markets on the east coast back $5-10/MT or more week on week due to the current forecast weather events on both the west and east coasts. This will likely play out for old crop over the coming months with any extended dry outlook likely to increase values while weather events will pressure prices to the down side. Griffith market zone started the week out at around the $400-405/MT mark but by the end was seeing a lack of demand (bid side) and offers chasing the market down to around $390/MT delivered Griffith. Young market zone is still at a small premium to Griffith. New crop values have also slid over the past week down around $10-20/MT at $345-350/MT Port Kembla track which is still in the top 5-10% of historical prices.

Barley is slow going on the demand side. Some grazing demand over the last month has crept into the market as weather has turned cold limiting pasture and/or grazing crop growth. This may continue for the next one to two months especially with lamb prices heading well north of $8.00/kg in recent weeks. I would suggest if you are holding old crop stock and able to sell at levels around or above $400/MT exfarm to continue to do so. New crop has increased slightly closing the gap/spread between wheat at $285-290/MT Port Kembla track.

 
Oilseeds remain well supported locally with limited liquidity and possible reduction in planted acres across the whole country meaning new crop supply, even if close to average yields are achieved, should still be tight on supply for next year.

Prices as at 7th June

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

 

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