Matthew Noonan, Agfarm Account Manager Sounthern NSW
The end of this week marks the end of February warehousing. Many growers have had to make the decision whether to carry their unsold grain for another month. With the benefit of hindsight, resisting the urge to sell would have been the best decision, as futures markets have rallied strongly in the first two sessions of March. It will be an interesting couple of days to see if these gains can be held. Exfarm grain is being actively marketed for March delivery, with the first half of April being reluctantly offered in some cases. Anything later than this is going to interfere with cropping operations, and as usual, buyers are going to find it difficult to execute stocks over this period. Given the rainfall to the north of our region last weekend, it was surprising that prices didn’t retreat slightly. The fact that they held is a sign of the continuing strong demand into Queensland and Northern NSW, which is good for Southern markets.
Warehoused wheat saw a further cleanout toward the end of the month. Protein grades, especially H2, have been in demand and have traded as high as $325/MT PKE. ASW has traded as high as $292/MT PKE, and APW at well over $300/MT PKE. It is likely that the strong demand for system grain will continue, however at this stage, most growers are focusing their attention on exfarm grain. ASW/SFW wheat is being bid at $270/MT exfarm at West Wyalong and this price only increases as we move further north and east. At these prices, growers are seeing a $20/MT increase in only 4-6 weeks, many will start thinking that it might be time to engage the market. Protein grades have increased in value also, with grades such as H2 being worth more than $280/MT exfarm, however as we progress throughout the year the spread is likely to reduce as “wheat becomes wheat”.
In barley, after a flurry over the last 2-3 weeks of organising March and first half of April movements of onfarm stocks, sales somewhat slowed last week but some have still been able to shift parcels at values around $255-265/MT exfarm. So with the offshore movements in markets and a continued strong domestic demand, it is hard to see prices slipping much at present. If you’re not wanting to move any during sowing, now would be the time to treat your grain so that come post-sowing, it is ready to move if you are happy with markets at that time. We are also seeing some good pricing on new crop numbers, which if you can see around $220/MT site or better for F1 Barley, at this level it may be a good start to your 2018/19 season marketing program.
Canola has followed suit with cereals over the past week, with good export and domestic demand in NSW keeping values ticking upwards. We have seen trades going around $530-535/MT PKE Track. We are still not quite at $500/MT site in a few locations but getting closer, if we can see the market continue to edge higher in the coming weeks, be sure to touch base with us and set your target so that we can call should we see the number you are after. At $500/MT site, we should see liquidity creating a scenario that may stop prices wildly going higher. New crop is not at a level yet to get too carried away with, but is at $530-535/MT PKE track, whilst ROBE are offering $499/MT harvest delivery and $519/MT January 2019 onwards, which provides some good values.
Prices as at 2nd March 2018