Matthew Noonan, Agfarm Account Manager SNSW
We have seen another week of almost no precipitation here in Southern NSW. Last weekend’s front proved to be little more than passing showers and didn’t bring any significant falls. On a drive through the Southern Riverina yesterday I was surprised at how little moisture was evident on the surface; paddocks looked dry and dusty and there was very little vegetation to provide cover. Whilst this situation remains, there will be very little interest in selling new crop and we suspect that the minimal profile will cause a decrease in canola plantings and a subsequent increase in cereals. The pre-cropping window is getting smaller by the day and only small volumes are able to be moved in the early part of April. There have been several shorts into delivered homes, allowing growers to extract $3-5/MT on last week’s prices for wheat and barley. These are few and far between however, and most contracts are now April/May at the earliest.
The delivered markets for wheat have firmed slightly in response to the reduced willingness to deliver into the April period. Griffith wheat has traded at $270-275/MT delivered, and this has allowed growers to clear $260/MT exfarm for basically feed wheat. For those that have held grain up to this point, it has proved a very good decision. We always said that if we had to pick a year to have feed wheat then this was the year, given the very small crop, and it is likely that demand is going to remain strong until new crop comes on stream. In the short term, the dry weather has meant that the new crop market has become very illiquid and growers are not prepared to make any further physical sales until the moisture situation improves. In response, the new crop prices have increased $5-10/MT, giving around $250-260/MT delivered into feed homes or around $290/MT PKE for multi-grades.
After a few weeks of a more subdued feeling across barley markets, they have rebounded slightly. This week we have been seeing numbers more consistently near the $255-260/MT exfarm range over a large area north of Murrumbidgee, Parkes, and districts even further north, with pricing even raising $5-10/MT higher the further north you go. However to move large volumes in attempt to capitalise on these gains will likely not be a quick process. New crop prices are sitting nicely above $200-210/MT site in most locations for F1 barley, with +$10-15/MT for malt. We still believe the barley situation will get tighter as the year wears on, but for now prices should remain steady and I would have to say it is probably a better sell than feed wheat grades.
In canola markets, there is still a bit of unsold stock within the system at Port Kembla, with prices sitting around $520-524/MT PKE track. This has slowly grinded higher over the past few weeks as sales are slow. The unknowns that remain are how far covered are the domestic crushers and how this season’s crop is shaping up early. All reports are that there is enough canola in Australia to ration across all demand, and oilseeds internationally should be ok, but should a slow start for 18/19 occur this might help the old crop pricing going forward
Prices as at 29th March 2018