Matthew Noonan, Agfarm Account Manager SNSW
The last week has brought stormy weather and muggy conditions allowing storms to build in afternoons or evenings. However, it has been patchy and most of the Southern NSW grain growing regions have only received 1-10mm’s in total. Livestock producers are also looking over their shoulder for a change to come through and provide some green pick so they can continue holding stock. Some are already trail feeding or putting into pens for feed lotting. This hasn’t yet bought an increase to grain prices as most seem to be utilising stock held onfarm from harvest before looking to test the market for supply.
Most wheat markets again are steady for now. There has been some softness appear, but this seems to be more from a lack of liquidity on both sides of the grower/buyer fence. We might start to see some market firmness through February and March as we see some consumers come back into the market to cover themselves further, but for now, prices will remain range bound. Griffith market zone continues to stay around $435-440/MT Feb-Mar while Young MZ is either similar or $3-5/MT stronger. Track markets have softened by $1-5/MT over the past week. One would suggest lack of liquidity is the main cause. New crop pricing remains steady at around $350-355/MT Port Kembla track, after last week’s jump. This is definitely worth looking at but with all the factors (weather forecasts, very early in season, current markets) taken into consideration, being conservative might be the best approach for now.
From looking around, barley still remains a demand issue, with only a few major homes taking for the moment and only smalls moving grower to grower for livestock needs. A little more time is required on the barley situation with buyers sifting through exfarm and/or delivered Jan/Mar 2019 contracts placed last year or prior to harvest before dipping their feet back into the water. Barley supplies will be tight, but most major demand points (QLD, Melb/Geel, Sydney) can be serviced by boats from WA which had a near on record harvest with 4.3-4.7MMT produced. A good amount of this will make its way overseas, but should we even see 20-30% of it, that should alleviate some of the supply fears for consumers.
Ground hog day on Canola. Markets have hardly budged over the past few weeks so if you don’t see $10-15/MT upside between now and sowing then maybe this is a sell for now. Past this, prices will be determined by how good a start we have to sowing here on the east coast, and to a lesser extent overseas oilseed markets that will start to take shape by Apr/Jun subject to their own production prospects. For now, one would think there is enough canola in Australia to service our domestic crushing demands. Should too much be sent on boat to Europe or China from WA it might tighten supplies, but as we stand only 10-20% of a 1.2-1.4MMT WA’s canola crop has been picked up or scheduled to go out over the 1st Quarter of 2019.
Prices as at 31st January
* View of current market pricing. Does not represent current Agfarm bids.