Global risk premiums remain in major ag grain markets as dry weather continues to raise concern for the spring season in Canada and northern U.S. spring wheat regions. Low temperatures are stunting the progression of the spring crops in Eastern Europe, and a shortage of rain in the Australian wheat belt is also starting to influence markets. As we saw the U.S. crop progress report released for this week, it emphasised that more than 80% of the new crop is in the ground and has synced with the five year average for this period. Whilst global grain stocks are still comfortable, reduced planted area for 2017 will mean that markets will react to any supply issues through the growing season. Protein wheat is where most of the action is occurring in the U.S wheat markets, & they have been pulling up CBOT wheat & corn. This bodes well for local Australian farmers holding protein wheat in the system & on farm. Cotton has remained steady with slight fluctuations, & prices are remaining around $550/bale for current crop, with new crop 2018 steady at $525 to $530/bale. As Cotton picking is almost at the end of its run, yields have been below recent season averages and this is attributed to the heat faced over the summer period. The AUD/USD is remaining stubborn around $0.75, however Australian wheat remains competitive in export markets, even in the face of prices firm locally.

The end of winter crop planting is also nearing with most local growers utilising what moisture they have to get as much winter crops in as they can. Northern NSW is very patchy in terms of sub-soil moisture. Moree, north & east is generally in good shape. Once you go 50km west of Moree, the situation vastly changes. Narrabri north to Moree and east is also generally in good condition for soil moisture, but again west of the Newell highway is extremely patchy. Most producers have been able to get some area planted, albeit production is uncertain without rain in the next few weeks. Much of the far western area of Walgett will see little area planted to adequate moisture, and we expect to see more chickpeas planted for this reason ie. chickpeas don’t require much moisture until flowing in September/October, so this will buy them time to receive rain. Central QLD is in good condition, with a solid chickpea plant. Southern QLD/Darling Downs, is also reasonable. Central west & southern NSW are generally in good condition, with South Australia & Western Australia looking for rain.

The Australian east coast domestic market has firmed for all feed grain & milling wheat over the last week. Feed wheat delivered Darling Downs is now bid around $270, with feed barley around the low $250’s. Sorghum is close to being at parity with wheat, & in some cases trading overs. Downs delivered bids are around $265 to $270. January 2018 feed wheat delivered Darling Downs has traded $282 plus carry – up $10 from last week. Milling wheat is also firm & something worth discussing with us as prices vary depending on quality & location. Old crop chickpeas are still lacklustre ($1,030/mt July Downs) due to Ramadan, with new crop bid around $820 Downs for October/November. Old crop chickpeas are still bidding at $1,015 delivered Narrabri and new crop lowering to the $790 mark. Faba beans have slowly become interesting with values at $200 Ex-Farm depending location. New crop multi grade APW NTP Newcastle is bid around $260.

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