Harvest is now progressing well around the Narrabri district with the majority of faba beans and barley harvested. Most producers are now harvesting canola, bread wheat, durum & chickpeas. We anticipate that harvest is 10 to 14 days earlier than normal and on a similar timeline to last year’s dry season. Whilst most producers are generally pleased with yields considering the dry season, there are still many crops that have disappointed. Faba beans were generally disappointing and prices have fallen, initially reaching around $420/mt delivered to Narrabri, but now at $400/mt.
Barley is best priced ex-farm for both feed & malt. Current prices are $245/mt delivered Liverpool Plains, and $280/mt delivered Darling Downs. Malt barley is $335 delivered Brisbane, adding a significant premium to the bulk system. Protein wheat has certainly been at a premium delivered to Narrabri packers, with APH1 reaching $325/mt, although this week it was back to $316/mt.
Canola was valued earlier in the season at $500/mt ex-farm around Narrabri on a hectare basis, but this week it’s around $420/mt ex-farm, except for a “prompt short” which has seen canola fetch $440/mt ex-farm to go into Newcastle for crushing. Producers should certainly be selling in to this market if they have 42% oil or better, otherwise, if they have minimum 38% oil, they should be looking at $417 ex-farm – flat priced on oil as their AOF discounts will make them worse off. There are a number of canola buyers in the market this season and it’s refreshing to see some competition for canola outside the track market.
Chickpeas have settled well back from contract highs coming into harvest and are now around $410 delivered Narrabri. Durum wheat is a shining light in terms of prices. DR1 is currently bid around $485/mt Newcastle port, with buyers willing to book reasonable offers from producers. This equates to $445/mt delivered Narrabri, which is a $135/mt premium over it’s bread wheat equivalent APH2. Last year durum was trading around parity with bread wheat, but the price is being driven up by buyer competition with a number of Multi National buyers looking to purchase durum this season, who are not normally in the durum market.
For growers who have stored grain on farm, or are looking at their marketing plans, there are a few factors that AgVantage believes should be considered;
1. What is your quality?
a. If high protein, we suggest selling this quality. The market is currently paying a premium for protein, reflecting the lower protein profile of U.S & Canadian Spring wheat. Once this market is filled, the domestic market will not pay a premium for protein to go down an animals throat.
b. Off grades with protein & screenings – AUH, HPS. We strongly recommend calling us for your options, as more than likely, this will work best in to the packer at a significant premium to the bulk system. Having said this, delivering to the packers does not come without it challenges. We suggest pricing now, & delivering post harvest where possible. If you must deliver now, call us, as there are some better delivery options out there that we can assist you with.
c. Low protein wheat & barley – ASW, AGP, F1. We would suggest considering storing this grain as a drought hedge. That is, if it remains dry, & we don’t get much of a sorghum plant/crop, domestic feed grains will remain supported.
2. What are your cash flow requirements?
a. If you need cash now, sell faba beans, & high quality wheat. Hold canola, lower grades of wheat & barley, hold chickpeas. We suggest that the next opportunity to sell chickpeas will be February/March 2015.
b. If you can defer your income, hold low grade grain on farm until January onwards, as this market is paying a premium to carry the grain of $10/mt or more. Also by this time, the market will have a handle on the sorghum crop. If things improve, your low grade might decline in value, but this will be offset by having a sorghum crop. If it remains dry, your low grades will be supported by the domestic premium to own grain locally.
c. Selling sorghum now, & holding low grades on farm is also another hedge growers can look at. If your sorghum crop yield declines, or does not eventuate, your low grade wheat & barley will increase in value. If the season improves, & your low grades decline in value, this will be offset by having a sorghum crop. You can adjust your position as the season progresses & yield potential & prices become clearer.
Well, haven’t things picked-up since Tuesday’s report? The phones are ringing and there’s a sense of urgency to get prices and keep trucks and headers moving. I’m sure, given the season, this won’t last long so we are enjoying the buzz for now.
Prices seem fairly stable this week. Wheat into Narrabri is holding values well above $300 for APH1 & APH2, which are the best harvest prices we have seen in a few seasons. We are continuing to contract multigrades on this basis. Unfortunately, there probably won’t be a lot of grain going into Moree this season due to the strength in Narrabri prices. For growers who want to store grain on-farm and deliver post-harvest, we do have post-harvest multigrades available. SFW1 delivered Downs is bid $292 for Oct/Nov & $293/$300 for Jan, plus $2.50/mt carry for Feb onwards. For growers who are delivering grain into the system, please do your sums on where you are delivering. We understand you want the best returns for your grain but as an example – if you normally deliver to Merah North because you are in the Spring Plains region, have a look at what it would cost to get this grain to Narrabri or Bellata and if this benefit will outweigh the cost of freight.
We have a number of buyers keen to purchase canola for prompt or Nov/Dec pick-up. Edgeroi/Bellata prices today are $415-417XF and for growers with lower oil we have min 38% oil, flat-priced contracts available. For growers with higher oil, we have full AOF specs too.
We are able to purchase faba beans into Wee Waa as well. Today our bid into Wee Waa for No1 is $390. We are also still buying out of Agripark and into Narrabri. Chickpeas remain flat and today, close to $400/mt delivered Narrabri. The strongest pricing point for chickpeas is into Allora at $435/mt.
On a still night you can hear the purr of headers in the paddocks now after a weekend of perfect harvest weather. This weekend’s expected temps are in the high 38’s so we expect crops that are still turning to come in pretty quickly. Faba beans are still being harvested and those heading into Moree have been reasonable quality, but into Narrabri we have seen a few loads rejected for trash/weed seeds and high admix. These are all problems fairly easy to solve with grading. A reminder we have Kwik Kleen machines for sale & hire – which do a fantastic job on cleaning up fabas and peas.
Wheat into Narrabri is coming in as mostly APH, and some loads screenings 5-10%. With the current strong prices being offered into local packers, it’s pushed a number of traders out of the market, including domestic consumers/millers. We know most growers want to take a ‘wait & see’ approach to making wheat sales, but the current export market is not trading at levels being paid locally. We expect prices to drop once grower selling emerges. Currently, H2 delivered Brisbane is $325/mt and a $7/mt discount to APW.
Feed barley ex-farm for Jan/Feb pick-up or delivery is attracting a premium over Nov/Dec, today that premium is up to $25-30/mt.
We have been buying faba beans into Moree at $385/mt delivered with a $10/mt discount to No2. Goondi today would be a $408/mt delivered, and a $20/mt discount to No2 quality. Narrabri values aren’t very aggressive at the moment and are more like a $375-380/mt.
Chickpeas continue to remain fairly flat, and delivered Downs/Allora is where the money is. At $400/mt delivered Goondi, it makes sense to deliver to the Downs at $435-440/mt delivered. Narrabri values are closer to $380/mt delivered.
We currently have homes for canola ex-farm for Nov/Dec pick-up or Jan/Feb/Mar at a $20-25/mt premium. These contracts are flat-priced, with a minimum 38% oil requirement. This would be ideal for anyone with oil content lower than the AOF spec as the price is competitive with full AOF spec prices.
Faba bean harvest continues, and barley kicks into gear in the north as well. South of Narrabri early barley crops seem to be 1-2 weeks away from harvest with lots of enquiry on ex-farm barley for prompt pick-up as growers want to move it straight off the header. Prices delivered LPP at the moment for Oct-Dec delivery are in the low $240’s. While this is not exciting too many LPP growers, it is giving Central West growers an option to move into these markets at values above delivered system or Dubbo values. We believe these harvest delivery homes will be covered fairly quickly from Central West tonnes.
In the north, enquiry is still fairly quiet. Anyone with forward sales will look to fulfil these commitments and then make a decision on what to store/sell.
We currently have homes for canola ex-farm and in the system. We have flat-priced contracts with min 38% oil, or full AOF spec contracts. For growers not looking to store on-farm, the preference is AMPS sites for delivery. For growers storing on-farm, there are significant premiums for Jan through to June delivery.
Delivered packer values for high protein grains have softened around $5/mt this week but are still at significant premiums to system deliveries. We urge anyone still considering options for delivery to call us. We have been crunching sums and doing the analysis many times over already this season for growers. In one instance yesterday we worked out that the premium for a particular grade into Narrabri versus a Multigrade price was $60-65/mt. I believe the cash prices for this grade would narrow that gap but is an example of the decisions you need to make to give you the best return.
Mungbean values remain strong with a constant stream of grower selling. These contracts are hectare contracts with no min/max for deliveries. We are also able to supply seed.
As harvest progresses we are seeing more enquiries emerge from growers wanting to know what to do with their grain. Again, growers remain largely unsold and are looking to price some for cashflow. We have a number of different strategies for growers to utilise in terms of where to take grain and what to sell at harvest opposed to what to store and sell post-harvest.
We have homes into Gherkes, Moree and Narrabri for high protein grades of wheat. These destinations can accept high screenings as well.
We have been buying faba beans into Moree during the course of the past week at $395/mt for No1 quality with a $10/mt discount to No2 spec. Goondi numbers are the same. Narrabri prices are between $378-403, depending on who is buying each day.
Chickpeas remain fairly quiet but we have buyers onto the Downs, delivered Allora, Goondi, Moree, Narrabri and Dubbo. We also have warehousing available at Agripark Moree and Auscott Narrabri.
Mungbean values remain strong and growers are selling as crops are emerging. We have had a number of growers inform us if prices remain strong and conditions allow them to do so, they will plant a summer crop on the back of wheat also.
As barley harvest progresses, a reminder we will have buyers of both feed and malt in the system or on-farm. Malt on-farm will be difficult to move off the header, it will most likely be a post-harvest pick-up as the maltsters won’t want it until Jan/Feb. North Star will probably be the best pricing point for malt in the system as it’s proximity to Brisbane is ideal.
New crop sorghum delivered Downs prices have been range-bound between $260-270/mt and today is just shy of the $270/mt mark.
Don’t forget to call us for a comparison of grades & prices!
Faba bean prices have taken a bit of a dive into Narrabri this week. A few weeks ago we reported that above $400 most buyers wouldn’t be able to compete as the offshore market wasn’t that strong. The buyers posting high prices to get grain through their facilities have now pulled bids back in-line with other buyer’s bids. Moree values remain strong (compared to Narrabri) at $395/mt delivered with only a $10/mt discount to No2’s. Domestic consumers are out of the market due to strong export values and at these prices, we would recommend giving strong consideration to selling now.
New crop sorghum delivered Downs remains in the low-mid $260’s for March/April delivery and Brisbane just over $280/mt.
New crop F1 delivered LPP is currently around $252/mt for Nov/Dec delivery. Compared to track values and other ex-farm bids, this is a very strong number that should be given some consideration for those looking to price some harvest deliveries for cashflow. In the north, we have demand for up to 350mt barley for pick-up this week at a premium over new crop prices. Harvest values delivered Texas are $252/mt delivered and can be delivered off the header. Most other homes are difficult to move off the header due to space availability.
Chickpea values have softened again this week. Delivered Downs values are $433 and delivered Narrabri is $408.
A reminder for any growers who believe they will have high protein wheat. A quick comparison of multigrade prices versus packer values – APH1 $318 del Nbri versus $285.50 del Nbri GCORP. That’s a difference of $32.50. That spread is greater when you have a grade like HPS1 with min 13% protein. $270-275 del Nbri packer versus 235.50. That’s a difference of $34.50-39.50 per tonne! Even a 100mt parcel is a $3,450 difference – straight into your pocket!!
A little bird was flying south for the winter. It was so cold the bird froze and fell to the ground into a large field.
While he was lying there, a cow came by and dropped some dung on him.
As the frozen bird lay there in the pile of cow dung, he began to realize how warm he was.
The dung was actually thawing him out!
He lay there all warm and happy, and soon began to sing for joy.
A passing cat heard the bird singing and came to investigate..
Following the sound, the cat discovered the bird under the pile of cow dung, and promptly dug him out and ate him.
Morals of the story:
(1) Not everyone who shits on you is your enemy.
(2) Not everyone who gets you out of shit is your friend.
(3) And when you’re in deep shit, it’s best to keep your mouth shut!
Faba beans are coming off this week, and we have homes into the Downs, Allora, Goondi, Moree, Narrabri and Dubbo. Prices aren’t easy to obtain early in the morning so for anyone wishing to price on a load-by-load basis, this may be difficult to keep trucks moving. We see the faba market coming under pressure with traders covering in short positions – paying the highest prices. Other traders are sitting on the sidelines, waiting for the market to come down. We are seeing French & UK beans up to $100/mt discount to Australian beans into Egypt. Today, we are seeing $425-430/mt delivered Downs, $395/mt delivered Goondi and Moree and $403 delivered Narrabri. In a few early samples we have had reports of low quality and even No3 specs for poor colour and defective grains, including insect damage. Unfortunately, these will be difficult to grade out, but any samples with splits and small grains should grade well. If you are concerned about quality, we are offering warehousing for faba beans and chickpeas again this year into Agripark, and also Auscott Narrabri. This allows you to deliver and sell a known quality. Please contact us for a warehousing agreement which will require signing prior to delivery.
With daylight savings commencing over the weekend, we are now an hour behind Qld and this sometimes delays pricing out of some of those merchants based north of the border.
We have the ability to price wheat on a multigrade basis delivered packer into Narrabri and Gherkes, and delivered Moree also. These values are well above current system prices, so please call us for any pricing for wheat if you are unsure whether to deliver to the system or send elsewhere.
For those of you gearing up for harvest, we wish you all the best, and remember to give us a call if you would like to know what the best marketing options are for your grain this season.
- 3 October – Cereal R&D Trial Walk, 10am-11.30am, ‘Nowley’ Howes Hill Rd, Spring Ridge, Liz Tydd, 02 6763 1454
- 5 October – NRL Grand Final, 6.30pm, ANZ Stadium, Sydney
- 8 October – Australian Grains Industry Seminar, Goondiwindi, Mick Keogh, 02 9690 1388, http://www.farminstitute.org.au/news-and-events/upcoming-events/Australian_Grains_Industry_Seminars
- 8 October – Annual Winter Crop Open Day, 8.30-10.30am, Liverpool Plains Field Station, Breeza, Liz Tydd, 02 6763 1454
- 9 October – Mungindi Cropping Group Field Walk, 9am-12, ‘Bullawarrie’, Mungindi, Jo Weier, 0427 231 701
- 17 October – Managing Your Grain Storage System: Getting It Right For You, 9am-12, Dubbo, Peter Botta 0417 501 890