SNSW Market Update 23/11/2018

Matthew Noonan, Agfarm Account Manager SNSW

This week has seen another stop start affair with storms rolling through much of Southern and Central NSW. Regardless of this, harvesting powered on a head this week – which unfortunately in a lot of cases is due to low yields rather than good harvesting conditions. The highest rainfall recorded this week was in spots up around Parkes with 40mm’s in some cases. This was also the biggest fall for the year giving Parkes around 25% of its annual rainfall.

Looking at wheat markets, we are seeing some harvest pressure on prices with the crop quality make-up being predominantly H2 – APH1 throughout Port Kembla. Many are taking advantage of prices sitting well over $400/MT site on these grades and selling as it is coming off. From January onwards, the saying ‘wheat will become wheat’ will most likely ring true as consumers may not be covered too far out. Looking at some of the current pricing it’s not too far away. The delivered Griffith market zone January + carry is around $415-418/MT level while a H2 in a BHC site west of Griffith is around $400-402/MT at time of writing (Thursday 22nd November 2018).

The barley market hasn’t seen volatility like this in some time. The market was trying to wrestle some demand back and work itself to a more historical spread to wheat values (ASW1/SFW1), then China came out with the anti-dumping announcement. Within two to three days from Thursday/Friday last week the market lost $20-30/MT throughout much of Australia. We are now seeing the Port Kembla track market around $400/MT, pushing the spread from ASW1 out to $40-50/MT which might see some retracement over the coming days/weeks. Selling has reasonably stopped for time being on barley, with wheat and canola viewed as better relative sell.

Like wheat and barley, canola markets have seen a slide week on week with Port Kembla track back around $10-15/MT as harvest pushes through reasonably quickly in eastern and southern NSW. Since the start of November which was about the peak of the 2018/19 Port Kembla canola price, it has decreased by around $32/MT compared to around $7-10/MT through the same period last year.

 
 
 
But, by the time harvest was complete through VIC last year the market had fallen around $70/MT. The biggest question on canola this year is how covered are the East Coast crushers, and do you sit on your canola into next year? Looking at current prices, if you sit out until around March or April, the market will need to rally around $9-14/MT to cover warehousing and interest costs compared to selling now
 

Pictured: Storm rolling in over canola harvest in the Riverina this week.

Prices as at 22nd November

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

 

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