Matthew Noonan, Agfarm Account Manager SNSW
Harvest progress has moved along the past week with most either done or closing in on the final stages. Irrigated wheat in the western Riverina is now in full swing while the majority of barley and canola is done throughout Southern NSW. The last 24-48 hours has seen some storm activity and between 5-20mm’s of rain. This looks as though it will delay the finishing run until the back end of next week. For those who have already finished, this rain is laying the foundations for some moisture to be conserved over the coming months.
Wheat markets remained relatively steady week on week. As mentioned in previous weeks, feed markets will underpin the wheat market in Southern NSW. Looking at the wider picture of Australia as a whole, this area has some of the most expensive grain for domestic consumers. Predominantly the crop make-up has been H2 or better which will play into the hands of millers, but for short term it will restrict nearby access to grain for feed consumers. However, if you give it time APW1/H2 will start to work into these locations as wheat becomes wheat in 2019. There is potentially a ceiling in the market at present based off execution costs from WA where more of the crop (big crop at that) has been ASW1/APW1.
Some barley demand has started to creep back into rations with the spread currently sticking around $35-40/MT under wheat. This should remain if barley wishes to stay relevant. The next 6-12 months barley pricing will be more dictated by grazing (onfarm sheep and cattle) demand, and at present this has reduced significantly due to spring/summer rainfall throughout much of eastern NSW and parts of western NSW. Barley pricing is currently around $390-400/MT delivered Southern NSW. Some spot loads and small tonnages will be going for higher.
Canola harvest throughout Southern NSW is all but done, with yields overall being very disappointing, which was to be expected. The job for crushers will be to extract what tonnage they can locally but like the wheat market, will be capped by pricing in areas it may execute cheaper, such as southern Victoria and north east SA. $600/MT exfarm Southern NSW should be achievable for Jan 2019 delivery and onwards.
Prices as at 13th December
* View of current market pricing. Does not represent current Agfarm bids.