Matthew Noonan, Agfarm Account Manager
3 minute read
Not a lot of rainfall this week but driving around it looks like some locations have good potential. I know it is early, but some cereal crops have the potential of 3+MT/ha. There is a lot of stock on crops which will likely have another three to six weeks before they need to be locked off to allow crops to go through to grain. Old crop markets remain rather steady not really leaning one way or the other at this stage. Tomorrow (Saturday) looks like we may get some rainfall through Southern NSW ranging from 1-5 in the Central West and South West Slopes while parts of the Riverina could look at 10-15mm. The potential gets better heading into Victoria. Unfortunately, the areas that really need it look like they will miss out again.
As above, most old crop domestic wheat markets are rather subdued. Possibly consumers/buyers are waiting for an influx of liquidity as we hit a new financial year next week and beyond. We may see some renewed selling, but with the belief there is limited supply out there it may be short lived. There is three to four months to go until new crop hits the bins so premiums above new crop will remain for the foreseeable future which is currently around $30-60/MT dependent on the grade and market. If the Central West, Northern NSW and Southern QLD remain dry it may be more of a ‘meet somewhere in the middle’ case come harvest. Current levels have seen both track and delivered markets firm up $5-10/MT over the past week starting to close in on some resistance levels. New Crop APW1 multigrade markets have also firmed a few dollars, with Port Kembla track now looking at $360-365/MT. This level will remain until some grower selling starts up, and as this happens you may see some of these markets soften.
Odds and sods of barley are trading around the place, but to find any major demand you either have to look south into Victorian markets like Goulburn Valley and Melb/Geel, or to the very north into feedlots of Liverpool Plains or Southern QLD. Even then there is a small amount of livestock demand which will mean those market zones miss the tonnes.
If holding any old crop barley, the general thought is you need to be proactive in marketing this, as for now there is close to an $80+/MT discount to new crop. Moving into new crop, as long as it holds its current spread to new crop feed wheat values, it may well wrestle some demand back, which will need to be drawn down once it hits the bins. We will definitely hit the end of the year tight on stocks but by our forecasts, these should be replenished and some come Nov/Dec/Jan. Current levels are at $295-300/MT Port Kembla track which is definitely in the 8-9 decile range of historical pricing.
Canola has softened this week by $5-10/MT on both old and new crop with Port Kembla track ranging from a $600-607/MT for old crop and $595-603/MT for new crop. As per previous reports there are less acres, but as long as yields can hold up, we look well positioned to see an average crop for the area. Like most years, at this stage canola looks like it will be a harvest sell, as the costs to carry far outweighs any possible market gains that could be seen from these levels into 2020.
Pictured: Crops looking good in the Riverina
Prices as at 27st June
* View of current market pricing. Does not represent current Agfarm bids.