SNSW Market Update 19/07/2019

Matthew Noonan, Account Manager Southern NSW

3 minute read

Most of the rainfall this week fell in the south east of the cropping belt or into the slopes with crop condition in the south looking healthy overall. Hopefully this continues as the months roll on as the southern third of NSW will shoulder the majority of NSW production this season. The state as a whole should produce much more grain than last year but will be concentrated south of the Mid-Western Highway and east of Newell in south eastern areas. Old crop markets have lost some significant dollars recently with a mixture of grower and trade grain coming to the table over the past few weeks.

Old crop wheat has really dipped the last few weeks. This is due to a mixture of grower grain finally sussing out markets and selling tonnes post June 30, and the continued selling of old crop supplies by traders. This has provided good comfort for consumers to push out their cover on old crop just a little closer to new crop where the discounts through Southern NSW have been around $50-60/MT. Old crop Griffith market has retreated to around the $365-370/MT level. As for new crop pricing, the next four to six week’s direction hinges on the crop’s prospects. If we can maintain the current potential in the majority of areas it could eventually soften as we head into harvest. However, should below average rainfall or warmer than normal temperatures bring yield penalties and reduce the crop size, prices will stay firm and may increase over time.

Barley continues to be a hard commodity to move through much of the Riverina with grazier demand not at levels like this time last year. Most major market zones are using a majority of wheat in the ration due to barley price being similar to wheat in most cases. There is still $380-400/MT exfarm sales happening for a load here and there, but overall the market is pegged at around $340-360/MT. New crop is still holding its ground at around $290/MT Port Kembla track which is sitting at a good level in comparison to new crop ASW1 with a discount of $30-40/MT. If this spread is maintained, it may be enough to wrestle back some demand into domestic homes and allow more volume to move come harvest and into 2020.

 
Canola mostly held its pricing levels this week. As per above the southern and eastern parts of NSW will have to shoulder the majority of NSW’s production prospects. As a whole, it looks like the crop will likely be larger than last year by a considerable amount which should make it easier for crushers to accumulate their 2020 requirements. This should spell out to most that canola will be a good harvest sell at current levels providing a sale at a very good decile and also cashflow early in the harvest.

Pictured: Barley, canola and Long Sword wheat north of Barellan NSW.

Prices as at 18th July

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

 

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