WA Market Update – 13/09/2019

Reid Seaby, WA Regional Manager

1.5 minute read

“A lot of variation in crop maturity and potential but all will benefit greatly from a good rainfall event”

The dry start to Spring continues and the reality is, crop expectations are shrinking by the week. This week, parts of the Geraldton, Kwinana and Esperance cropping zones experienced temperatures in the low to mid 30’s, and if these conditions persist then crops will really struggle to hold on. That illusive 20mm rainfall event is becoming more critical by the day as crops draw on what little moisture is left in store.

However, warm temperatures haven’t been the only dilemma in the last couple of weeks, as temperatures last Thursday night and Friday morning fell well below zero in and around Esperance. Areas such as Salmon Gums, Grass Patch, Cascade and West River experienced temperatures as low as -5 for a sustained period which has unfortunately completely frosted some crops. This has left some with no option but to bale for hay, whilst others don’t have that luxury as the crops are too mature to cut.

The less than ideal growing conditions are having a positive impact on grain prices. It was a sea of green this week as bids jumped as much as $19 for some grades. APW1 in Kwinana was up $8 to $328 whilst ASW was the big mover, climbing well over the $300 FIS mark. Feed barley continued to be well bid, up $13 to $290 FIS in Kwinana. Canola’s move was less impressive, up $1 to $622 per tonne. 20/21 wheat is getting back up near $300 per tonne, ending $8 higher at $293.

Pictured: Crops at Kalannie (top) and Bencubbin (bottom)

 

 

Prices as at 12th September 2019

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

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WA Market Update – 06/09/2019

Reid Seaby, WA Regional Manager

1.5 minute read

Most of WA recorded decent rains over the weekend which will definitely help yield prospects as we move into the critical month of September. Although the heaviest of falls came near the coast, parts of the Geraldton and the north/eastern Kwinana zone had 5–15mm, around 10mm in Esperance and up to 25mm for areas in the Great Southern. Farmers are still keen for a further >25mm event to get them through, because without it, the crop potential will start declining rapidly, particularly as daytime temperatures start to climb.

The forecast is showing nothing for the next 10 days and next week is bringing temperatures in the high 20’s and low 30’s. This will cause soil moisture levels to deteriorate pretty quickly particularly given crops will be consuming lots of moisture as they tiller and come into head. On a positive note, the BOM’s September to November seasonal forecast shows WA is likely to see a wetter than normal September…. Fingers crossed this medium-term forecast is accurate!

Price moves have been positive this week with dry weather on the east coast and the absence of farmer selling maintaining a bullish tone domestically. WA’s barley bids have been well supported by the east coast and this pushed feed values $7/MT higher this week to $277/MT in Kwinana while malt values ended at $305/MT FIS. Wheat was higher across the board with bids jumping about $5/MT for the week. APW in the Kwinana zone is sitting at $320/MT FIS. Canola continues its slow increase with CAN1 in Kwinana bid at $621/MT.

Prices as at 05th September 2019

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

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WA Market Update – 30/08/2019

Reid Seaby, WA Regional Manager

1.5 minute read

There are three cold fronts expected to pass through WA from today (Thursday) and into the weekend, hopefully dumping 10 – 20mm across some of the agricultural regions. This rain does come after a warm spell in the middle of the week so it should prevent any further yield declines for the time being. Northern cropping areas are really starting to struggle, while any rain received in southern regions will maintain the potential for above average yields.

Due to the late break and lack of subsoil moisture to kick the season off, crops remain heavily reliant on regular rainfall and cool temperatures for the next month or so. For this reason, there is potential for the final grain production figure in WA to swing dramatically. A lot of moisture deprived crops in the north are struggling and without rain and cool temperatures other regions will begin to follow. The potential for downside is very much in play and yields will slide if we get a period of warm, dry weather.

Markets remain pretty thin and new crop selling has been pretty scarce. Barley however seems to be a better story than wheat at the moment and growers have been a little happier to slowly continue their sales program over the past fortnight. Prices haven’t fluctuated dramatically over the last two weeks’, but wheat is generally a little higher while barley is off slightly. APW1 in Kwinana is sitting at $316/MT, H2 is $324/MT and ASW is sitting below $300/MT at $294/MT FIS. Malt barley is still hovering around $300/MT and feed is currently being bid at $270 FIS. 2020/21 wheat has come off $7/MT over the last 14 days.

Prices as at 29th August 2019

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

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WA Market Update – 16/08/2019

Reid Seaby, WA Regional Manager

1.5 minute read

We’ve seen some good falls over the past couple of days and it couldn’t have come at a better time. There have been a few questions surrounding local production in recent weeks after signs of the weather becoming warmer, increasing the potential for yields and production to deteriorate. But rainfall totals of between 5 – 20mm for the majority of the state has kept things advancing and maintains soil moisture levels. Unfortunately, the rain was a bit variable with some growers luckier than others, particularly around the lakes where there were reports of up to 40mm. Some follow up rain prior to the weekend looks likely and if this favourable trend continues for the next month then average to above average crops are very achievable.

WA grower bids fell away this week following the release of the latest USDA report and the bumper US crop. Given the uncertainty surrounding this year’s production, growers are unlikely to sell too much for the time being, particularly if prices continue to edge lower. Kwinana APW was down $7/MT this week to $313/MT FIS with all other wheat grades falling. Barley bids also fell with feed dropping $5/MT to $276/MT. Canola was effectively unchanged and next season’s APW was down $5/MT, back to $300/MT. Although bids were off this week it’s important to note prices still represent good value and those who have confidence in the season seem happy to slowly but surely chip away with small sales.

Pictured: Crops in Nungarin aren’t distressed but do have a long way to go, hence the need for a soft spring

Prices as at 16th August 2019

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

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WA Market Update – 09/08/2019

Reid Seaby, WA Regional Manager

1.5 minute read

Most cropping regions welcomed showers over the last week, keeping things on track for the time being. Although most areas have adequate moisture for now, growers are seeking a good 20mm event to bolster moisture levels and maintain the crop’s potential. Unfortunately, the forecast for the next two weeks doesn’t look very promising and it doesn’t seem many areas will receive significant falls. This will take us to the latter part of August and moisture will start to be of concern as most crops in the state are only at the 3-4 leaf stage and well behind where they normally are for this time of the year.

A dry couple of weeks across most of WA has also kept growers on the sidelines with their grain marketing. The lack of grower engagement and the firmer tone on the east coast has offered support for WA bids. Weakness in the AUD also added support. Kwinana APW was up $5/MT to $320/MT FIS and ASW values are now pushing $300/MT. Next season’s wheat bids were also higher this week, jumping to $305/MT FIS. Feed barley was much stronger, up $11/MT from last week to $281/MT FIS in Kwinana. Canola has been trading in a tight range for the last few months but has recently popped and is now at $616/MT FIS Kwinana, up $10/MT from last week.

Prices as at 8th August 2019

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

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Term Loans, Overdrafts and Specialist Short-Term Finance

Term Loans, Overdrafts and Specialist Short-Term Finance

5 minute read

The Agricultural lending landscape can seem complicated and difficult to navigate at times. There are multiple reasons farmers seek finance and multiple financial institutions offering a plethora of products. The five loans most commonly adopted in agriculture are short term finance, agribusiness line of credit (overdraft), term loans, livestock finance and equipment finance. The main financial motives are land purchases, capital expenditure or cropping inputs. Before making the sometimes-difficult decision of which product is right for you it is important to get the right advice and prepare the necessary business plan, cash flow projections and other relevant financial information. To make the decision a little bit easier, we’ve put together a quick summary of term loans and overdrafts and how they can complement specialist short-term finance options.

What is a term loan and what is it used for?

A term loan is a loan repaid in regular instalments over a set period of time. Term loans usually last between five and ten years but may last as long as 30 years in some cases. The customer generally has a choice of variable and fixed interest rates and may also have the ability to split the loan between fixed and variable to get that balance of certainty and flexibility. Repayments are generally principal and interest, but most financiers will offer the potential for an interest only period. This is a mechanism some farmers use to delay capital outlay while their assets get to a point of producing a solid income. Term loans are often used to facilitate large purchases such as property or making capital improvements such as new farm buildings or other infrastructure.

What is an overdraft and what is it used for?

An overdraft facility is a credit agreement made with a bank or financial institution that allows an account holder to use or withdraw funds up to an approved limit. The facility works like an approved loan where money can be withdrawn as and when required and the farmer is only charged interest on the amount borrowed and only for the time it was borrowed. The line of credit is generally given based on a client’s assets. The overall limit and the rate of interest charged is determined by the size and nature of the asset which is offered as security. Overdrafts are generally established for farmers who have short term cashflow needs and the balance is either repaid monthly or annually.

There are many different forms and functions an overdraft can have such as assisting cashflow, covering crop inputs, machinery payments, interest costs, term loan repayments, stock purchases etc. Farmers need to be cognisant of what they’re using the overdraft for and ensure the facility they choose meets their requirements. Consideration needs to be given to the loan term, repayment frequency, collateral required, flexibility and costs.

Why specialist short-term finance?

While the two above-mentioned forms of finance will always have their place, other seasonal finance options can at times be more appropriate and, in most instances, complement the above-mentioned loan types. For example, when using an overdraft in tandem with a specialist short-term facility such as Agfarm Accelerate, overdraft funds that may have been allocated to crop inputs can be freed up for other uses such as stock purchases, machinery payments and staff wages, increasing cashflow during the season and potentially decreasing the size of the intended overdraft.

What is Agfarm Accelerate?

Agfarm Accelerate gives broadacre and dairy farmers a line of credit at participating rural merchandisers for crop inputs such as fuel, agchem, irrigation water, fertiliser, lease payments, seed and crop insurance. Although this may seem similar to an overdraft, Agfarm Accelerate takes security over the future crop rather than physical property. The facility is paid post-harvest from commodity sale proceeds when cashflow isn’t as tight. For more information on Agfarm Accelerate and how it can assist your business’s cashflow, call your regional manager on the contact details below or visit agfarm.com.au/finance.

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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WA Market Update – 02/08/2019

Reid Seaby, WA Regional Manager

1.5 minute read

WA cropping areas recorded some showers over the past week with 1 – 10mm in the Geraldton zone and 1 – 5mm in the Great Southern and Esperance regions. Falls were lighter in the central parts of the Kwinana zone. Although July was slightly drier than average, crops haven’t suffered because fortunately, they are still sitting on good moisture. However, given the crops are late it means they remain vulnerable to hot and dry weather, making the next month or so critical to production outcomes. Ongoing dryness and warming temperatures through August and September will likely see some yield declines in most areas.

Although markets have been generally moving in the right direction, grower selling remains lean at this point of the season. Local wheat markets were higher as APW1 in Kwinana jumped $5/MT to $315/MT FIS and the spread to ASW1 closed slightly. The malt barley spread on the other hand opened up to $30/MT this week given feed bids dropped $5/MT to $270/MT and malt pushed up to $300/MT FIS Kwinana. Canola bids continue to trade in a tight range.

Prices as at 1st August 2019

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

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WA Market Update – 26/07/2019

Reid Seaby, WA Regional Manager

1.5 minute read

Not much has changed over the last week as crops in WA continue to become established after the slow start. Although the growth is behind normal, crops still have ample moisture and there is no great urgency for more rain at this stage. As we near the end of July the general consensus is a good rain in August will maintain the rage and a 20mm+ event in September will be required to assist grain fill and enable the crops to meet their potential. Production prospects do remain on a knife’s edge however and final yields will be heavily influenced by the spring. With the BOM forecasting an even chance of average rainfall during August – October we are likely to see some variability within regions, depending on if, where and when the rain falls.

Very little has changed fundamentally within grain markets and as a result, there has been limited grower selling the past week. The Black Sea region is coming to the end of their harvest and while there was some speculation the dry end to their season may impact production, there are now reports showing both production and quality have in fact increased. Despite this, bids in WA were well supported this week. 2019/20 wheat bids were up about $10/MT with APW1 landing at $310/MT FIS in Kwinana. Barley bids were also higher with feed up $16/MT to $275/MT FIS. Canola bids jumped back over $600/MT to $605/MT FIS Kwinana.

Prices as at 25th July 2019

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

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WA Market Update – 19/07/2019

Reid Seaby, WA Regional Manager

1.5 minute read

A sunny week across WA has accelerated plant growth rates and enabled growers to get on to paddocks and apply herbicides and additional nitrogen. For the most part, crops are in very good condition, albeit later than average. The later start should however mean crops are flowering outside of the frost window. In addition to this, soil moisture is very good across the state, so everything considered, things are pretty positive for the time being.

Although crop conditions are good now, we certainly recognise it is only early in the season and there are plenty of risks ahead. Although moisture isn’t a limiting factor at the moment, we will be heavily reliant on a kind spring with low temperatures and average to above average rainfall. This will be even more critical around the eastern Albany and western Esperance zone which experienced a drier June than everywhere else.

The markets were pretty quiet this week and a little mixed. The July USDA report was ‘bullish’ wheat, but it ultimately showed there will be sufficient stocks to meet demand, hence the resulting flat tone. Wheat bids in Kwinana were slightly higher as accumulators seek to find a price where growers will engage again. APW1 was up $5/MT to $300/MT FIS. Feed barley was essentially unchanged at $259/MT in Kwinana, but malt values fell away slightly to $285/MT FIS. No news with canola again as it continues to sit around $600/MT FIS in Kwinana.

Pictured: Crops progressing nicely as they soak up the sun

Prices as at 18th July 2019

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

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WA Market Update – 12/07/2019

Reid Seaby, WA Regional Manager

1.5 minute read

More rain at the end of last week kept rainfall tallies ticking over, further bolstering crop prospects and adding to the already better than average moisture profile. The front brought falls of up to 50mm, with the northern and eastern wheatbelt faring the best. Thankfully the western parts of the Albany zone and eastern parts of the Esperance zone, who have missed out on much of the recent rain, had falls of around 20mm. These areas do however have little stored soil moisture so will rely on consistent rain moving forward to achieve average to above average yields.

Conditions are excellent in most of the state’s cropping areas and some coastal parts are bordering on too wet, so the fine weather forecast for the next week or so will be a welcome change. Growers are taking advantage of the sunshine and are now busy applying nitrogen and their first round of post emergent sprays.

Markets were generally a little softer this week with the catalysts being the easing crop concerns in WA, SA, Vic and the softer tone in US markets. Both canola and barley bids are unchanged from this time last week, but wheat has come off a little bit. APW1 bids in Kwinana fell below $300/MT this week, down $6/MT to $295/MT. Other grades were also lower but red crop APW1 was steady at $290/MT FIS in Kwinana.

Pictured: Soils are wet and crops are progressing well in WA

Prices as at 11th July 2019

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

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