Matthew Noonan, Agfarm Account Manager
3.5 minute read
The change that came through on the weekend stayed mostly to areas already looking reasonable and have potential this coming season. Anywhere from 5-20mm’s fell in southern areas and to the south east of the state. Some areas of the southern Central West received a bit more this time around West Wyalong, Condobolin, Parkes etc, which will allow these crops a little reprieve. However, the Central West still remains very tight on moisture reserves and crops are well behind southern ones. The next eight-day forecast shows another 5-10mm’s but unfortunately still has the north and central parts of NSW missing out.
Old crop wheat markets ended last week around their resistance levels with Griffith market zone bid around a $400-405/MT. Since then with some decreases in futures, a small amount of local rain and just a general pull back post some sales from late last week and early this week, the market is closer to a $390-395/MT but lightly offered again. This will likely continue over the coming months. It will be a bit of a see-saw effect ranging in a tight frame of $10-20/MT; when it gets to the low end consumers are keen but grower/trade offers lighten off and when it gradually climbs back to the highs, sales happen again. Looking at new crop (2019/20), prices remain solid historically for this time of year at around $355-360/MT Port Kembla track back slightly week on week. With no real grower engagement on forward physical contracts it’s expected to hold steady, at least until we see engagement. This may be another four to eight weeks away with most likely waiting until spring to see how they are sitting production prospects wise.
There is still a small volume of barley trading into graziers. Consumers barley usage through Southern NSW and Central West is light compared to wheat. This will continue while it holds its value close to wheat values. So, if holding any good volume of barley, selling old crop stocks over the coming months will be crucial with a nearly a $80-100/MT inverse to new crop values. This is not to say if the top two thirds of NSW stay dry that we will see new crop values creep higher, but for now there is significant downside risk if holding old crop stocks.
New crop values are sitting around $290-295/MT for F1 Port Kembla track at a $30-40/MT discount to new crop wheat values. If the spread holds for a while, barley may wrestle some demand back into domestic homes if it can hold this current spread which, with a larger acreage planted nationwide than last year, it may keep this level compared to wheat values for the short-medium term future.
Canola has softened again on both old and new crop. This has been more a case of limited demand, but also futures softening this week. There is not much spread from old to new crop so risk of carrying old crop into next year isn’t at the levels of wheat/barley. For now though, the cost of carry needs to be considered. It will likely cost $10-20/MT to carry through another four to five months. It’s expected a change in price is more likely to come from overseas factors such as a smaller soybean crop in the US or hiccups in the Canadian or European crops which have not had any major issues at present.
Pictured: Great to see a sea of green in Culcairn NSW.
Prices as at 4th July
* View of current market pricing. Does not represent current Agfarm bids.