Matthew Noonan, Agfarm Account Manager SNSW
At the time of writing (Thursday 6th September), there is some light rain falling in Wagga Wagga. There has only been around 1mm so far, but more is forecast for later on in the day. Looking at the radar, the main body of the front is around Albury, but there should still be some rainfall as far north as Cowra, although it may not amount to much. The prospect of 10mm is hardly a game-changer, and we need far more than this to make a real difference. Some growers in the Riverina have indicated the extent of the frosts a week ago may not be as severe as first though, especially in the barley crops – a positive sign. At risk of repeating ourselves, the region’s cereal crops still hold potential although the chances of growing a >3MT/Ha crop is fairly slim. Many are considering baling crops for hay to minimise losses. This would normally be quite a risky move without contracts in place, but in a year like we’re having, the demand for these commodities should remain strong well into next year.
The old crop wheat market is largely unchanged from last week. Delivered into Griffith, the SFW price has remained around $420/MT delivered, and the Young market is around $10-15/MT over this number. Growers are still able to make exfarm sales at $410-430/MT with some decent premiums existing for protein. New crop wheat is still extremely strong at $460/MT Port Kembla track, which is up $10-15/MT from this time last week. There is very little liquidity across the board for new crop sales in NSW at $410-420/MT site. The price is exceptional, but production is nowhere near assured at this point in time.
Old crop barley values have experienced little change week on week with few tonnes trading in large volumes. One would think at current levels of $430-450/MT exfarm, upside is limited and with new crop just around the corner, price risk to the downside is more likely. But so far, this year/season has brought surprise after surprise. New crop values have recouped their losses from a few weeks back to be around $400-410/MT Port Kembla track. On both the old and new crop front it looks as though grazier demand will be the main factor through to 2019 and beyond. The main pressure point after this will come from sorghum in the north.
Old crop canola has strengthened further this past week up to around $605-610/MT Port Kembla track. Its expected canola will remain firm for the short term, particularly when you drive around the region and see livestock in canola paddocks. The time to do something with old crop canola is nearing, as once warehousing charges increase in October/November you will need to see bigger gains to recoup those charges. New crop canola has also seen gains with values up around $625-628/MT Port Kembla track. We expect canola will be a sell at harvest this year because, as spoken about with barley, we are getting to levels where price risk to the downside becomes a real thing and as the harvest progresses into Victoria, this could bring pricing pressure.
Pictured: View of the area north of Walla Walla
Prices as at 6th September