Nathan Michael, Agfarm Account SNSW
With the vast majority of the region receiving 5-25mm of rain in the last week, crops are continuing to establish and jump out of the ground. As was true last week, the crops to the south and east of Wagga Wagga look the best, whereas areas to the north of Parks and west of the Newall highway are struggling for moisture. We have spoken to several farmers in the Western Riverina and even some just north of Wagga Wagga who planted canola crops in April that have not yet emerged. The total rainfall across the region year to date is only 20-30% of the average, thus crops are doing as well as can be expected. A good indicator of the level of confidence is the amount of new crop grain being sold. Wheat and barley is around 30% of normal levels at this time of year and canola is at <5% of normal sales. Taking into account the very high pricing levels, the limited liquidity of new crop selling in NSW shows the level of nervousness.
Prices for new crop wheat have remained extremely strong in the face of the rainfall we have received over the last week. Many would have been expecting basis to come under pressure and prices to fall back, but if anything, they have strengthened slightly. Port Kembla track pricing is now in excess of $350/MT (for an APW multi-grade) which is a once in a decade occurrence for this time of year. Grower nervousness and unwillingness to engage with the market, even at these levels is likely to keep prices strong in the short term. Old crop is relatively unchanged at around $325-335/MT exfarm.
Barley demand has started to slow up for now, with the opportunistic feed lotters mostly having their stock at the point to send into local saleyards or processors. This has limited the demand causing prices to stagnate. As far as pricing goes, we have been seeing $340-360/MT exfarm for small parcels consistently. While F1 barley prices remain above feed wheat prices, barley is a better relative sell. Whereas the new crop spread of ASW – F1 is around a $20-27/MT discount and at more of a ‘normal’ level. New crop barley is being priced at around $305-310/MT Port Kembla track which presents opportunity to sell at a decile 9-10 for Nov-Dec cashflow. We suspect this will hold for now until the season progresses further and there is a better gauge on what production looks like.
Canola, like wheat and barley has remained rather steady week on week. Old crop is about unchanged to slightly back $3-5/MT in Port Kembla zone with limited selling. The wait is now on to see how the new crop shapes up, before old crop stocks really get considered. New crop pricing is unchanged to slightly stronger which is no surprise with less acres in a fair portion of the region and stories of early sown crops being replanted with barley and eventually sprayed out. So, as we progress through the season, anything below average in terms of planting will assist in pushing prices upwards, assuming international oil prices will also give some direction.
Pictured: Irrigated wheat at Jemalong west of Forbes
Prices as at 21st June 2018