March 2014 Articles
This month feed grain values have remained strong and we have touched season highs. Delivered Brisbane wheat saw over $380/mt delivered however, recent weather events have pulled values back to the tune of $20/mt on wheat. Although we have seen a pullback in values, we believe grower selling will also dry up and consumers still require stock through until new crop. Growers keep reminding us that it’s not ‘raining grain’ and that consumers will need product to keep them going right through to new crop harvest, which is true.
Barley demand and prices have been up and down through March also. Demand comes and goes as the spread between barley and wheat narrows then widens again. Currently, the spread is quite narrow and there is not overly strong demand present. This will probably continue on a week-to-week basis.
Chickpeas spiked earlier in the month on the back of weather concerns and crop damage to the Indian crop. These were unsubstantiated fears and the trade feel it was a false rally as destination values weren’t reflective of local values, nor were they sustained. Demand for chickpeas seems to have quietened down into Narrabri and Moree destinations, however is still present on a delivered Dalby/Oakey basis for may delivery. This year Ramadan falls over the period from 28th June through to the 27th July so the end of May is really the last opportunity to deliver old crop chickpeas before the this period. After this, there most likely won’t be another opportunity to price and move old crop peas until new crop harvest.
This past week, every conversation has been focused on the weather and how lovely it is to receive rain after it being so dry. We have seen or heard of the following falls being recorded for the week;
Gunnedah 121mm, Boggabri 101mm, Maules Creek 167-212mm, Narrabri 177mm, Wee Waa 128mm, Burren Junction 113mm, Rowena 73-113mm, Walgett a disappointing 30mm, Edgeroi 180mm, Bellata 140mm, Moree 71mm, Wathagar 231mm, Garah 60mm, Weemelah 134mm.
Whilst the rain has been a very welcome relief for most, those that have cotton in the ground ready to pick will be anxiously waiting to see how these new varieties, especially 74 will respond to this event.
We are starting to talk new crop with both growers and sellers and buyers are keen to look at new crop wheat, canola and barley. Values have been attractive, however even with good falls of rain around, we are still in need of follow-up rain to give enough confidence in putting a crop in the ground. Generally, this kind of rain now would fill a profile and allow growers to go ahead with their full plant. As it currently stands, most growers had zero subsoil moisture going into this rain event and it we will be interested to see what kind of profile this will leave them with. It’s certainly a good starting point for follow-up rain, especially in the Walgett district, where falls were disappointing compared to the eastern areas. For most, faba beans and canola are already ruled out and they will look to winter cereals and chickpeas now. We will have a number of buyers interested in canola hectare contracts for anyone that will plant canola this season.
The USDA Stocks & Planting Intentions Report is due out on 31st March and usually gives the market direction. At times, in the lead-up to and post report release, we can see large swings in the markets, depending on market expectations versus report findings.
On Thursday 20th March, Chris, Erin and Alex Harris from ECOM attended the Upper Namoi Cotton Grower Awards Dinner held in Gunnedah at the Rugby Club. It was a well attended evening with close to 100 people present. At times, these events can attract a lot of industry representatives but lacking in grower numbers. This was an exception. The grower attendance was very strong and both dryland growers from the southern corner through to irrigators in the upper were present.
The Winners categories were broken down into Dryland Crop of the Year, Irrigated Crop of the Year, Innovative Grower of the Year, and Grower of the Year. The judges visited each crop and they reported that the calibre of the entrants made judging very close and it was a matter of splitting hairs.
The dryland entrants were:
Alex & Graeme Norman
Scott & Jo McCalman
The winner of the dryland crop for 2013/2014 was David Ronald from Spring Ridge.
The irrigated crop entrants were:
Andrew Ruhmann & Phil Morgan
Mark & Glenys Hamblin
Peter & Georgia Watson
Rod Smith & Nic Gardiner
The winner for this category was Mark Hamblin.
Innovative Grower of the Year was Scott Morgan, for his work on water and energy efficiency and solar powered pump set-up which looks quite impressive.
The grower of the Year was Andrew Ruhmann from Morcot Farm Pty Ltd.
A big congratulations to all the winners. The Association will hold a field day next week (Tuesday 1st April) to visit some of these properties to look at soil health and fertility, remote monitoring devices for soil moisture, bores, water levels and watering options (lateral and flood). If you are interested in attending, please contact Sandy at Cotton Australia on 0448 094 8830448 094 883 by today, 28th March for catering and transport purposes.
True to recent volatility, last night wheat and corn were sold off throughout the session. May wheat futures fell 11.5 cents and closed at 696.75cents/bushel. The drivers behind this move was rain received in two large wheat producing states in the US, Texas and Oklahoma. Aussie weather is also making news internationally with rain being received this week. Locally, the trade know that further significant falls are needed as we head into our planting window. Corn was down 2 cents and the May contract finished at 484.5cents/bushel. No real news in the corn camp. overnight and a narrow trading range resulted. Soybeans rallied overnight and closed at 1440cents/bushel, up 12 cents on the May contract.
Our Dollar traded higher overnight and this morning was trading at .9224
Cotton took a dive last night, after a massive trading range in the overnight session. The May 2014 contract has a trading range of 652 points and closed down 245 points at 91.66US cents/pound. We still believe that at these levels, mill demand is minimal as yarn prices have not lifted in-line with cotton futures. The July/Dec spread after last night’s close is currently at 12 cents. As a result of this backwardation, ECOM will discount any bales delivered post-24 June at the market spread at the time. If the inverse fades and we see carry emerge in the July/Dec spread, growers will also achieve this. Today’s ECOM price is $515/bale, down from yesterday’s $530
The chickpea market seems to have gone quiet again after the recent spike. Today, values are around $470/mt delivered Dalby and $425XF Cryon/Rowena for May delivery. We are also able to look at parcels of 2012/2013 season peas that are still on-hand. If the colour and specs are good quality, there seems to be a minimal discount to current crop. We would, however, need to see a sample of these prior to negotiating a price, as the appearance of chickpeas is a very strong indicator of price.
This week most of our conversations have been focused around the rain we have been receiving across the region. For most, it’s a good start and we have seen or heard the following recorded over the past week; 25mm at Rowena, Burren Junction 81mm, Merah North 77mm, Edgeroi 82mm, Bellata ranged from 56-87mm, Narrabri 110-128mm and east of Narrabri (towards Maules creek has ranged from 93-153mm), Boggabri 87mm, Morvenvale at Rowena 54mm. Interestingly, the Morvenvale weather station also has moisture reader capability at various depths and was installed in early August 2013. During the very early hours of this morning, for the first time since it’s installation, it has picked up a soil moisture reading at a depth of 6 inches! This soaking rain is starting to build profiles, but we understand there is still a long way to go to ‘break the drought’. I (Erin) was speaking to my in-laws last night who were previously from Wee Waa but now live at Yeppoon in Qld. They were complaining about how wet it was up there and how they could send some of the rain received down here. I was wondering what their fuss was about and this morning I looked up their readings…. To my amazement Yeppoon has received over 21 inches of rain in the past 7 days!!! Lets hope we do get some of that down this way too.
With the widespread rain this week falling across most of the east coast, prices have softened across the feedgrain complex and bids are softer this week. Wheat delivered Downs late last week was pushing $375/mt delivered and today it’s back around $353. Barley is again priced out of the market as the spread to wheat is less than $10 and most consumers stepping away. Traders may still have positions on into destination and are still bidding $343 delivered Downs, but at these levels, consumer demand is non-existent. Sorghum values have also softened slightly, today at $340 delivered Brisbane and $314 delivered Newcastle.
Last year AgVantage had an exclusive arrangement with Blue Ribbon Seeds to accumulate mung beans on their behalf. With the competitive nature of this industry, and the small crop this year, we have been approached by a number of other buyers to purchase on their behalf and have agreed to do so. Mung bean values have remained strong over the past few weeks and there is still demand for Aussie mung beans internationally. Quality reports so far have been pretty good, with most samples falling into the Processing quality. Heat has affected the seed coats and we have seen some wrinkly coats as a result, however these have still made Processing quality. Our delivery destinations are Goondiwindi and Dalby and for anyone with mung beans on the Liverpool Plains or Narrabri region, don’t be afraid to check out these homes, as prices have been comparable in years gone by.
David received a parrot for his birthday. The parrot was fully grown with a bad attitude and worse vocabulary. Every other word was an obscenity. Those that weren’t expletives, were to say the least, rude. David tried hard to change the bird’s attitude and was constantly saying polite words, playing soft music, anything he could think of. Nothing worked. He yelled at the bird and the bird yelled back. He shocked the bird and the bird just got more angry and more rude. Finally, in a moment of desperation, David put the bird in the freezer, just for a few moments. He heard the bird squawk and kick and scream-then suddenly, there was quiet.
David was frightened that he might have hurt the bird and quickly opened the freezer door. The parrot calmly stepped out and said “I believe I may have offended you with my rude language and actions. I’ll endeavor at once to correct my behavior. I really am truly sorry and beg your forgiveness.” David was astonished at the bird’s change in attitude and was about to ask what had made such a dramatic change when the parrot continued, “May I ask what did the chicken do?”
The team robed up in ORANGE to encourage worldwide harmony and celebrated with a super easy Orange Poppy Seed Cake – a good one for the lunchbox:
Throw everything into the food processor for a quick and easy treat. Add ¼ cup poppy seeds if you wish.
1 whole orange, ends removed and chopped (keep skin on)
150g butter, melted
1 cup sugar
1 ½ cups Self Raising flour
- Preheat oven to 180deg C.
- Process the orange pieces until finely chopped.
- Add remaining ingredients and process until smooth.
- Pour into a greased and floured ring tin and bake for approximately 35 minutes or until a skewer comes out clean.
- Remove from tin and cool.
Warning – photo taken by 5yr old Baxter!
Grains saw gains in overnight trade with wheat leading the charge. The May contract was up 21.25 cents at 714.5US cents/bushel. US weather forecasts for a dry 10 day outlook and strong export inspections were the main driver of this upside. This strength spilled over into corn and the May contract saw gains of 11 cents to finish the session at 490cent/bushel. Soybeans were also up and the May contract saw gains of 16.75 cents in overnight trade. Although the USDA weekly export inspections came in below expectations, a strong demand for soymeal and strong crush margins saw beans find strength.
Locally, today the grains market has a softer feel to it. The delivered markets for feed grains are off $5-10/mt and consumer demand is minimal. Offers remain at levels we saw trade last week but bids are almost non-existent. We believe values to still be around $320-330XF border region for 70/10 wheat and sorghum at $300XF border region. We do have homes for SOR2/SOR3 and SORX.
With a strong basis and domestic values keeping grain onshore, we have still been keeping an eye on offshore protein markets. Current demand for Aussie protein wheat from the east coast that will work into south-east Asian markets is thin, with the run-up in futures making our wheat too expensive for their requirements.
Cotton futures overnight traded to a high of 93.75cents on the May contract but found resistance and finished the session down 268 points to close at 90.63cents/pound. This has converted ECOM’s cash prices to $514/bale today after reaching $532/bale yesterday. While ever futures remain above 90 cents, we expect Mill demand to remain quiet.
Rain received in the past week is a double edged sword for cotton growers. Whilst providing those with some relief for winter crop programs, this is the time of year most are looking to defoliate and commence picking.
A group of farmers from the Climate Champions program are in Canberra this week, talking to scientists from the Weather Bureau and CSIRO about climate research and what farmers need.
SOURCE: ABC Rural