SNSW Market Update 31/05/2019

Matthew Noonan, Agfarm Account Manager

2.5 minute read

A majority of planting is now finished in the southern third of NSW, with crops at varying growth stages, but overall looking better year on year. As you head into the Central West, plantings have been a bit later and there are still some acres to go in pending further moisture, with final acreage to be determine in the next 2-4 weeks. As we sit right now you could pencil in a larger Riverina / Murray crop than last year, with spring rainfall set to be the major factor.

Markets have surged high this week due to the compounding effects of local dryness and decreased corn plantings in the US. Consumers and trade alike are showing increased interest as continued dryness puts upwards pressure on local prices. This is being supported by wide spread flooding in the US corn belt, where there is talk of a large decrease in plantings and possible yield penalties. These factors have led to strong gains across wheat, particularly to consumers with small amounts of forward cover.

The 2019/20 season should bring a year on year increase on production through much of Southern NSW & the Southern Central West, presenting an opportunity for those with old crop supply to take advantage of this current rally. So far, we have recovered 50-60% of the fall since the harvest highs, supposing the question, can it keep going. One idea would be to start some sales and average up and protect some downside risk as this year has proven it can happen. The current Griffith Market Zone is bid around $395-400/MT with some business likely going through a touch higher. The South West Slopes markets are very similar with increases marginally higher than Griffith. New crop has continued to go from strength to strength on the pricing front with the Port Kembla APW1 Track market now around $368-375/MT. Considering the condition of majority of Southern NSW I would say this is at a premium for now but is most likely being run up by external factors.

Barley is slowly following wheat values up, but still lacks demand as most large consumers have preferred wheat & sorghum over the past 3-6 months. Some grazing demand is creeping in now it has gone cold and lamb markets are hitting some good highs again. I have no doubt grain will be getting sold for $400/MT plus Ex-Farm through much of the region, which for me is a continued sell. As far as new crop goes, it is remaining subdued compared to wheat with the ASW1 – F1 spread at around $70-80/MT. With the prospect of a larger crop of barley nationally and current uncertainty around one of our major export destinations in China, a $230-250/MT site price or $240-260/MT Ex-Farm Jan 2020 might end up being a good sell.

At present, oilseeds are probably a small follower of the corn and wheat markets at present giving small increases on old and new crop. As per previous reports it is probably better to stand aside from marketing new crop and try to sell down old crop inventory. As we see it though, the East Coast will most likely grow what they require for local crushing/feed demand and not much more.

Pictured: Canola off to a good start near Berrigan, NSW.

Prices as at 31st May

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

 

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