Alistair Murphy, Agfarm Account Manager CNSW
We are now expecting a few weeks of dry weather which will allow us to wrap up the last of the 2017 harvest in Central-West NSW. The majority of cereals have now been completed, with only some clean up paddocks east of Dubbo left to complete. Chick peas are still experiencing a slow harvest, as recent rain and an abnormally cooler start to summer has seen progress in pulses be deferred once again.
Grain prices across the board have been weaker this week, with international futures slumping back to recent lows on the back of sluggish US export figures and better than expected cereal output, specifically from Canada. On a domestic front our basis remains very strong, reflecting the drop in production this year especially in Northern NSW and Queensland. With the lower trend in markets this week, we have seen sellers retreat as most growers have sold what they need to in the short term.
The biggest mover this week was base grade ASW1/SFW1 wheat, coming off last week’s values anywhere between $7-8/MT. This was partially due to the weakness in international values, but primarily due to a pricing correction by the market in anticipation of downgraded crops yet to be harvested across Victoria and southern parts of Port Kembla. The extent of downgrades isn’t known, and will not be quantifiable until the southern areas make greater progress on unharvested acres.
Chick pea values continued to soften this week, though the drop was less than the negative $10-15/MT we saw in recent weeks delivered to the Central NSW packer. The weaker Australian dollar has helped shield additional downside this week, but with values still well over the $600/MT range we expect to see a decent amount of selling as tonnes hit the bin once again. Despite values being off around $150/MT over the span of a month, historically speaking prices are still at a high decile compared to previous averages.
Traders and consumers are still keenly watching any developments in expected production values from the upcoming 2017/18 sorghum crop. Early speculation saw the crop size estimated at around 2MMT this year, although many of these assumptions were made on the basis we would continue to receive good follow up rain in key sorghum growing areas, allowing for a successful late plant heading closer to Christmas. While there have been some good falls around, the areas which traditionally have a more ideal climate for late sowing sorghum has missed out on the bulk of the rainfall received. Additional rainfall in these areas is needed in the lead up to the Christmas if we are to hit that magical 2MMT mark. Definitely worth keeping an eye on!
Photoed: Winter cereal harvest is now all but wrapped up for areas west of Dubbo.
Prices as at Friday 8th December 2017