CNSW Market Update – 16/08/2019

Anthony Hall, Regional Manager NSW & QLD

1.5 minute read

We saw a little bit of rain last weekend in the vicinity of 2-5mm. However, it was very patchy throughout central NSW and northern NSW with a lot of areas not receiving anything. Moving into QLD, unfortunately there was nothing. There is some concern there may have been some frosting in crops this week with three mornings in a row below zero. The forecast for the next seven days is dry, and temperatures are on the rise again with 25 degrees forecast over the weekend. The warm weather looks short lived though as another cold change is coming through on Monday.

I drove from Dubbo to Gunnedah and Tamworth this week. Crops around Dunedoo and Coolah are hanging in there but in desperate need of rain to minimise yield loss. North of Coolah through to Mullaley looks poor with minimal crops planted. However, the closer you get to Gunnedah conditions pick up. The early sown crops are looking very good, the later ones are struggling a little as it looks like they haven’t been able to tap into any deeper moisture. The crops from Gunnedah through to Tamworth still look really good. On the southern side of Tamworth, the crop conditions drop off as soon as you get to Werris Creek and head west.

Prices as at 15th August

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

 
 
 
 
 

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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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VIC Market Update – 16/08/2019

James Ryssenbeek, Regional Manager VIC

2 minute read

There was good rainfall over the weekend for a lot of the state, a result of the snowy cold front. There are further light showers forecasted for the coming days. It is getting a bit too wet in the western districts now and some barely is yellowing off following 40-70mm through the area.

I spent this week between the Echuca and Swan Hill areas. Crops are looking very healthy throughout which is great, but the area will need rain to finish well. There is a lot of planet barley through this area and quite a bit has been grazed but is still looking very strong. Interestingly, I was told yesterday by an agronomist there are flag leaves appearing in some barley crops around Deniliquin. So, there could be an early harvest and it could also increase risk of frost damage with early maturity.

Old crop markets remain stable in Victoria with most sales enquiry coming from those clearing out silos. New crop has bounced around a bit this week following the USDA crop posturing. We are starting to see growers take some early cereal positions capitalising on current numbers. The same goes for both export and domestic hay sales. With the latest BOM update suggesting more average rainfalls into September, optimism should stay high for a good finish.

Pictured: Cobra wheat Strathallan

Prices as at 16th August

* 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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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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Weather, Prices and Production – What to Expect This Harvest

Weather, Prices and Production – What to Expect This Harvest

 

Chris Coore, Agfarm Advantage Manager

August 15th 2019

We’re less than a month away from Australia’s key growing period and the usual pre harvest jitters have started to set in for growers, consumers and traders. All market influencers are being watched with a keen eye; the weather, current grain prices, overseas news, production estimates, the list goes on. So, this month we’re going to take a look at these elements and what they’re doing to grain prices as we edge closer to harvest.

Australian Weather

Australia experienced a very good start for most of the cropping belt in Western Australia, South Australia, Victoria and Southern New South Wales but since mid-July the tap seems to have been turned off. This has understandably caused an element of panic. After a disappointing 2018/19 season growers, domestic consumers and exporters are all reliant on a more normalised season to replenish stocks and return to a ‘normal’ operating environment. Unfortunately, the radar is showing a dry finish and grain prices are following the outlook. The concern for a potential dry finish has been driven from a positive Indian Ocean Dipole (IOD) phase which generally creates cool ocean waters to form in the east limiting rainfall and causing higher temperatures for parts of Australia.

These weather concerns have caused grower selling around the country to slow keeping a strong bid tone in the current market from end users and exporters as liquidity from the sell side becomes thin. Meaning, in most new crop markets for wheat, barley and canola there are more buyers than sellers and it will likely stay that way until we see a break in weather or another wave of selling.

Image 1 source: http://www.bom.gov.au/climate/outlooks/#/rainfall/median/seasonal/0

Image 2 source: http://www.bom.gov.au/climate/enso/#tabs=Indian-Ocean

Production Estimates

In the early hours of Tuesday the 13th of August, the United States Department of Agriculture (USDA) released the August World Agricultural Supply and Demand Estimates (WASDE) report. The report was ultimately bearish for corn resulting in Chicago Corn futures trading the full daily allowable move down dragging wheat futures down 27 cents/bushel or $AU14.50/MT.

Starting with corn, the WASDE reported world corn production up 3.1 Million Metric Tonnes (MMT) and lowered world demand 5.8MMT resulting in world stocks to be up 8.8MMT.

The WASDE report was neutral for global 2019/20 wheat production for most parts of the world with the US being the exception. The report featured a 4.5% increase in US Hard Red Winter and Spring wheat which, coupled with a startling bearish report for corn, pushed Chicago wheat futures sharply lower. However, there is still concerns for Russia’s final wheat production number, Australia’s new crop production and EU wheat which has allowed cash values to remain stable.

Australia’s Current Grain Prices

Overall, wheat prices across Australia seem to be in line with the current market. Western Australian wheat is pricing close to export demand for new crop, Darling Downs delivered wheat is pricing off full execution from Western Australia, and South Australian and Victorian values are pricing domestic homes in NSW. Australian barley is completely reliant on China demand as we are too expensive for the traditional demand point of Saudi. If the ongoing anti-dumping investigation results in a no ruling and China imports Australian barley in 2020, prices should remain stable. But, if China does not use Australian barley, we will need to price Saudi demand which is $AU25-30/MT lower than today’s values in Western and Southern Australia. The Chinese Anti-Dumping probe will be one to monitor as any developments in this will dictate what happens to local barley prices. The other point to note is how wide the barley/wheat spread is in Australia for new crop. Barley will likely buy more domestic demand due to its discount to wheat.

What will happen to grain prices as we edge closer to harvest?

As Australia enters the key growing period of September, the biggest concern and the key price driver will be weather, something the entire grains industry is closely monitoring. If we see good rainfall during September, grower selling will follow which will push values lower. However, if the dry forecast rings true and production levels continue to creep backwards it’s safe to assume values will remain flat to firm coming into the harvest period as exporters and consumers look to get forward purchases on the books.

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CNSW Market Update – 09/08/2019

Anthony Hall, Regional Manager NSW & QLD

1.5 minute read

It’s hard not to sound like a broken record with the current weather pattern continuing as it has been and not favouring this year’s winter crop production. Unfortunately, the only thing different to last week’s report is crops have deteriorated more. Early crops that have tapped into some deeper moisture are holding on and still looking ok, but desperately need rain to maintain yield potential. Anything trying to survive with roots in the top soil only has either started to turn blue or pushed out a head at 3 inches in height. The next concern is the frost predicted in the next five days. I’ve seen plenty of flowering crops in QLD this week which is not going to be ideal. With the forecast for a dry spring and a lot of crops in need of decent spring falls to make grain many are leaning towards making the most of what they have standing and cutting into hay.

Speaking with agronomists and sorghum seed suppliers over the last week and the general consensus is forage seed is already in tight supply and with a sniff of a good forecast, grain seed will be also. Growers are being advised to commit early if they want to secure their preferred sorghum variety.

Pictured: Crops 10KM south of Goondiwindii

 

 

Prices as at 9th 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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VIC Market Update – 09/08/2019

James Ryssenbeek, Regional Manager VIC

2 minute read

There have been patchy rainfalls over the last 24 hours with a lot of cold wind. Birchip has had some great falls again at 17mm, which is really starting to set things up for a good season now. Hopefully there is more to come over the coming days.

I spent this week up in the north west of Victoria. There is still plenty of opportunity from Ouyen through to Swan Hill and north, but perhaps not quite the subsoil moisture support of their slightly southern compatriots. I saw good crops from Swan Hill through Chinkapook and then onto Ouyen. Crop condition starts to fall away once you get closer to and then north of Carwarp. We saw several clients west of Carwarp this week. All their crops are up, there aren’t obvious signs of stress, but rain is required sooner rather than later. It was blowing a gale there yesterday (Thursday) afternoon which wasn’t helpful!

Grain markets remain stable. We’re seeing increased onfarm grain offers from growers looking to free up storage in preparation for harvest. There is still only limited forward sales from those I have spoken with, however following last night’s rainfalls, some areas will be getting comfortable of good yields for cereal crops.

In other markets, new season milk contracts are being signed and prices are setting new personal bests for many, alas much of the benefit will be absorbed by water and feed costs. The dairy industry is starting to work through their fodder requirements to replace emergency stocks and normal requirements from broadacre croppers – a normal process, but thankfully there is a lot of crop to choose from compared with last year.

Pictured: plenty of dust rolling through south of Merrinee in Victoria.

Prices as at 9th August

* 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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