SNSW Market Update 01/03/2019

Matthew Noonan, Agfarm Account Manager

Weather wise we have had another steady week, with daytime temperatures around the 30 degree mark every day and no rain to report. The next week will see much of the same repeated, but with the potential of a cool change moving through late in the week. The European cropping season seems to be off to a good start which has resulted in subdued Australian markets this week. CBOT prices also took a fall, despite US wheat export inspections being higher than usual. Normally, this would be supportive of overseas values, however we saw CBOT drop 20 cents a bushel. Although overseas markets may not seem all that integral to our domestic market functionality, we need to remember Australia’s main export states, WA and SA, are being hit by these overseas movements and are attempting to remain competitive, resulting in cheaper grain executing into east coast markets.

Delivered markets in Southern NSW have taken another hit, with delivered Griffith now trading around $400/MT. Some of this can be attributed to cheaper grain coming out of WA and SA, as well as the trade continuing to liquidate some length in the market. Growers will be wary of selling at the current prices and it is likely there will be minimal grower selling until we see this downhill trend start to reverse. The other thing to keep in mind when trying to gauge where medium term markets may position themselves is the weather leading into sowing. A wide spread east coast break may mean continued market softening, whereas continued dry weather in the medium to long term may increase values over time as consumers being to run low on stock.

External market movements are also having an effect on domestic barley prices. There is talk in the trade that with the recent spread to wheat being around $30/MT plus, barley is gaining attraction for consumers in the ration. This might not flow on to increased demand straight away, however it could be a positive step towards slowing or halting the recent price declines.

Canola prices are in a bit of a yo-yo state at the moment, moving up and down $5-10/MT a week at any given time. Upcountry homes continue to price around $585-600/MT delivered while the Melb/Geel market zone has stayed under the $600/MT mark for around a week now. Reliance on upside is shorts in the market at the moment, but with the good reports coming out of Europe this upside won’t be coming from MATIF. However, CBOT soybeans could get some life if US/China relations improve and trade beings to open up.

 
 
 
 
 

Photo: Irrigated rice, cotton and sorghum near Conargo NSW.


 

Prices as at 28th February

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

 

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