Alistair Murphy, Agfarm Account Manager Central NSW
Feed markets have softened somewhat from last week’s highs as liquidity in the northern sorghum complex continues to impact on values. This week we saw values come off around $4-5/MT in feed wheats, with barley coming under less pressure and softening by about $1-2/MT. The slight drop has seen wheat sellers put the guns back in their holsters in hope markets may pick up again once sorghum liquidity dies down.
Protein values have remained relatively unchanged, and in some cases have seen a bit of a kick, getting closer to values we saw in early December. This recent upside in protein has mainly come from the local packers and millers as harvest liquidity is now well behind us. Protein spreads are doing some work to the upside in order to attract further selling into these key infrastructure and consumer zones.
Canola bucked the trend this week while following international markets, firming anywhere between $6-8/MT depending on the grains location. However, even with this upside, we are still a significant distance away from that magical $500/MT site values which leftover sellers would be interested in.
While selling activity has slowed down this week, we have seen much more inquiry regarding new crop values, as growers now look at early sowing intentions for next season’s crop. After speaking to a few clients, it feels we could potentially see a reduction in chick pea and canola acres, with preference for upping barley and wheat volumes this year.
A lot of this is due to current deciles where barley and feed wheat are at significantly higher values in comparison to this time last year, and pulse and oilseed values are lower. A reduction in chick pea acres is also inevitable, as rotational limitations have been stretched to maximum capacity in recent years, and sellers will have to rotate into something else in order get back into a more traditional regime.
Sowing is still quite a way off yet, so it’s still early days to be speculating too much into the new crop position. Sometimes we can see intentions change drastically with availability and timing of rain; a late break can mean a lot of the early sown crops can be missed and switched back into commodities with a more relaxed sowing window. We will start to get a better gauge of intentions as we head into March.
Prices as at 23rd Feb 2018