Matthew Noonan, Agfarm Account SNSW
The past week has been a bit of a tease through much of the Central West and Southern NSW. We have received anywhere from 0-15mm of rain throughout the region with the southern and eastern areas receiving slightly more than the western parts. This has only just settled the dust and follow-up rainfall is still desperately needed. Both old and new crop sellers have been reluctant to engage the market until they see meaningful rain to give them confidence around their 2018/19 production. The forecast for the end of next week looks a little promising, however the last 2-3 predicted fronts underdelivered leaving most apprehensive about the new predictions. Here’s hoping it brings 15-20mm’s wide spread and kicks the 2018/19 season off, as much of the sowing is now complete.
Old crop wheat remains strong into domestic markets through NSW, with Griffith trading at around $330/MT, Young at $330-335/MT, Newcastle at $375-385/MT, Liverpool Plains at $375-385/MT, Jindalee at $325/MT and Goulburn Valley at around $315-320/MT. These prices are providing opportunities to sell at a level which should create profit even based on low yields from last year. The new crop market, should you wish to take on production risk, is pricing at a $345-350/MT Port Kembla track which is in the top 1-5% of historical pricing. At present there is some depth in this market with three to five buyers all bidding around this level. If we receive adequate rain this market could potentially come off by $5-15/MT dependent on the amount of rain and how wide spread it is.
Barley old crop pricing seems to have found a level for now, with exfarm prices still around $340-350/MT exfarm north of the Murrumbidgee and $310-330/MT around the VIC/NSW boarder. And as with wheat, where old crop barley sits relevant to feed wheat pricing it presents value selling at this level. The best way to look at it is as per the below spread to ASW1/SFW1 pricing for old and new crop, with both wheat and barley new crop levels closer to a more traditional spread. As for new crop, if you are again confident on taking on production risk, with the likely increased area going into barley, values at around $250/MT exfarm January/March 2019 or $295-305/MT Port Kembla track are presenting excellent price risk mitigation going into the 2018/19 Season.
Old crop canola seems to have hit a snag in its recovery, flat lining this past week and sitting at around a $555-560/MT Port Kembla track. This has definitely given opportunities to exit old crop at a higher level than where we sat post-harvest January 2018. For new crop, with growers being reluctant to sell cereals forward, it is probably not advisable to be selling canola either. Current levels sit around a decile 6-7, and with lower acres throughout much of NSW likely, this might give reason to seeing higher prices later in the year, but canola follows overseas leads a bit more than feed grains (F1/SFW1) and will depend on how the northern hemisphere harvests for oilseeds line up over the coming months.
Prices as at 31st May 2018