Alistair Murphy, Agfarm Regional Manager CNSW
We have seen some sustained upside in grain values heading into the middle of March, with international values seemingly finding a new trading range for now. A lot of the recent upside in international markets over the last few weeks has been largely absorbed by our already strong domestic basis. However, we did see some of the positive movement pass through to values here in Central-West NSW.
Last week we saw the Liverpool Plains SFW1 market start to price competitively against the Darling Downs for the first time in a while, and values into the plains even briefly surpassed delivered Newcastle domestic prices. At present values, we are starting to see SFW1 in northern parts of Port Kembla start to work into Tamworth and Newcastle, whilst western Central West NSW is still executing into the Darling Downs market.
With the recent upside we have seen some additional selling hit the market, but with mid-range forecasts now predicting a dry March, sellers have been a little tentative in letting too much go. There have been some isolated falls here in the Central West recently, which in some instances has provided a good boost to the moisture profile for some growers. But by in large we really need a good 3-4 inches of soaking rain to get the profile back in order prior to the 2018 sowing window.
In chick pea markets, buyer interest has hit a bit of lull recently, as India recently increased import tariffs to a whopping 60% last week. Quite often we see buyers and exporters sit on the sidelines for a while once news like this hits the market, to give them time to work out what the resulting effect will be to destination markets.
What happens weather-wise in the next two months will have a massive bearing on where our markets head to from here. It feels like the market is starting to get a little concerned over the dry weather prospects for March and is starting to price accordingly, should widespread rainfall appear on the medium range forecast we would expect some of this built-in premium to dissipate somewhat. On the flipside, if it remains dry as we get closer to the new crop sowing window, the market will most likely to continue to build a premium to what we are currently seeing. Time will tell how this plays out.
Prices as at 9th March 2018