Matthew Noonan, Agfarm Account Manager SNSW
There was no rain whatsoever in the southern part of the region over the last week, with areas such as Parkes receiving just under 5mm as the front drifted too far north to reach areas such as Wagga Wagga. We have had a succession of sub-zero temperatures starting from Monday 27th August and the Tuesday frost reached -6 degrees in some parts of the Riverina. This is enough to burst water pipes, draw moisture out of the already dry ground and most damaging is the possibility of stem frost occurring. At first glance, many of the crops appear to be too under-developed to be at risk, however many have advised crops are still very susceptible and can be severely damaged by an event like this. We will only know for sure in 10-14 days’ time. Market wise, the demand for grain seems to have slowed down slightly with buyers reporting their customers have reduced orders or withdrawn out of the market altogether, having already bought some cover for September. A lot of this approach could down to the hope prices might have fallen further on the back of a large rain event… that didn’t eventuate. We suggest there is a good chance prices will stabilise and return to their former levels fairly quickly.
Both old and new crop wheat prices have fallen by around $10-15/MT in general. Off limited volume, wheat buyers have pulled bids back and have been met with selling resistance. The increased liquidity in the last two weeks has seen many buyers and consumers buy coverage for September and October and as a result, the short term pressure is reduced. The buyers are still there, but not with the same urgency as before. With at least eight weeks to go until any new crop becomes available, we would expect demand to remain fairly constant all the way through until November. Exfarm wheat is still trading at around $420-435/MT with a $10-15/MT spread to protein.
Old Crop barley markets remained rather steady due to limited supply/offers coming forward. As for new crop pricing, it has retreated from the highs due to the forecast rain event last week in Northern NSW and QLD, as this brought some sellers to the table, not necessarily in NSW and QLD but more so other states. Forecast production is still a very big hypothetical for many at present which will continue to put uncertainty with pricing and should keep a strong basis on feed barley prices through NSW and QLD.
Old Crop canola pricing has jumped again to around $595-600/MT Port Kembla track in an effort to draw out some supply from the main crushers. Even at this price there still remains limited tonnes being offered up due to the view of new crop production in NSW being below requirements from NSW processors. One would suggest this will mean strong bids early on at harvest and then as harvest progresses into VIC and SA they will shift focus there to get coverage. New crop kept its spread to around $10-15/MT above old crop values with again limited offers coming.
Pictured left to right: barley Galore, canola Culcairn, wheat Culcairn
Prices as at 30th August