AgVantage Commodities Market Report 29/01/2015

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This week started slow due to the Australia Day Holiday on Monday. While the trade in general have been quiet we have seen the sorghum market choppy this week. Sorghum delivered Narrabri last week was $270/mt delivered and today is $275/mt. Whilst growers would love to see a blanket SOR2 discount, the reality is this will probably only be available to the domestic market. As I mentioned last week, China is very strict on quality and SOR2 specs are quite broad so until we see large supply of good quality Sorghum sitting in a stack there is less likelihood of a SOR2 spec being negotiated on a contract for export destinations. Whilst demand has been stronger, the only grower selling present has been in the Northern border regions and it traded yesterday at $315/mt delivered Brisbane and today is back to $309/mt. Newcastle delivered today is $305/mt.

There is still demand for high protein wheat both in the system and delivered packer, which is attracting a premium over domestic feed grains. Multigrades are also available for on-farm grain and out-of-spec wheat is still in demand.

Barley is difficult to move at the moment, due to a lack of demand from consumers and traders. There have been a couple of large parcels offered up this week which have been difficult to move promptly and a lot of buyers are out of the market altogether for barley.

Faba bean demand is still strong with bids delivered Wee Waa at $480/mt for No1 spec and a discount to No2. This is for prompt delivery. Chickpeas delivered Downs this week are back up to $590-600/mt for March/April delivery, after falling up to $20/mt last week. New crop delivered Downs chickpea values are $560/mt for Oct/Nov delivery and a $10/mt discount to December.

Mungbean values have softened over the past week for the Summer crop. Last week we were seeing $1200/mt delivered Downs for No1’s and this week it’s back to $1150/mt. Spring crop values are still at a premium and we still suggest to anyone with unsold beans to harvest and sell based on the sample.

Cotton rallied slightly overnight and today 2015 bids are at $505.

 

AgVantage Commodities Market Report 27/01/2015

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Coming out of a long weekend here, we’ve seen wheat futures drop 10-15 cents on the March & December contracts. Our Dollar also traded down to 78.5USD but today is back up around 79.14USD.

With rain forecast this week for most of northern NSW, we are seeing the markets a little quieter today. Last week we reported that most consumers are covered out until April for feed grains and large parcels of wheat and barley are difficult to move prompt. We may see some trade shorts emerge between now and then, but come April, sorghum will be well & truly coming off from those northern regions and competing against wheat into consumer markets.

We are still seeing strong demand for sorghum on the export front both out of Brisbane and Newcastle zones. Given the lateness of the Liverpool Plains sorghum crop this year, many growers are unwilling to sell at current levels for two reasons; delivery period – most are seeking a July/August delivery period and secondly staining. Given the export market is strong at present, and domestic consumers are staying out of the market in Newcastle, it is difficult to offer a contract for late delivery periods with a tolerance for staining as they cannot guarantee that it won’t go to port. Today bids into Newcastle are $315 and Brisbane $315 and Narrabri $280/mt.

We still have strong demand for faba beans for prompt delivery into Wee Waa. Values have been trading at $480/mt delivered for No1 with a $15/mt discount to No2’s.

Chickpeas delivered Downs are back up to $600/mt delivered for March/April delivery. New crop chickpeas are bid at $555 for fixed tonnage. We haven’t seen many hectare contracts available for new crop to-date. These will probably more readily available once the crop is in the ground.

Mungbean prices have softened since last week and the summer crop is back $50/mt, currently at $1150/mt No1 Processing, $1100/mt Processing and minimum $900/mt for Manufacturing quality. Spring crop values are best determined on a parcel-by-parcel basis as there is both strong demand and strong prices for these beans due to the small spring crop.

Today 2015 cotton is back up at $500/bale and 2016 at $492. 2016 traded at $500 late last week and is bid there again today.

AgVantage Commodities Market Report 22/01/2015

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US markets were closed Monday night for Martin Luther King Day and locally buyers were quiet also. With futures markets softening considerably recently, Aussie cash prices have also fallen. Whilst prices have fallen, our basis levels are still well above US markets. We are still seeing premiums for high protein wheat delivered to local packers, including off grades. Domestic markets have softened and yesterday $305/mt delivered Texas and $315/mt delivered Downs was bid for 70/10. Demand isn’t strong as most consumers and traders are covered until the end of March and into April. New crop sorghum bids have been as high as $290/mt delivered Narrabri in early January and these markets are currently $270/mt delivered. A forecast this week for reasonable rain in the north has also seen domestic markets pull back from last week’s values, where sorghum traded at $280/mt delivered Narrabri. There is talk that China will have strong demand for sorghum this year, but with the lateness of the crop, staining will be a major focus as the Chinese market is very strict on quality and in particular colour. Sorghum delivered Newcastle is $313 today and $310 delivered Brisbane.

Chickpeas earlier in the week were as high as $480/mt delivered Narrabri again and $600 delivered Downs but yesterday pulled back to $465/mt delivered Narrabri and $590 Downs for Mar/Apr and $580/mt delivered Allora for Feb delivery. Although we expect strong demand through until April, rain forecast in the subcontinent, currency fluctuations and political moves will keep this market volatile through this period. We have seen heavy grower selling of chickpeas in recent weeks as prices have been up to $190/mt stronger than harvest values!

The Spring mungbean crop is close to being harvested and for anyone with unsold mungbeans that market is extremely hot at the moment. We suggest harvesting and getting your crop priced based on a sample taken. Due to the size of the Summer plant and the fact that it will compete with other destinations, these values are holding steady and haven’t spiked like the small-sized Spring crop. Yesterday prices were still $1200/mt delivered for No1 Processing quality, with $1150/mt for Processing and a minimum of $1000/mt for Manufacturing quality. It is important to clarify the ‘bells & whistles’ around each contract offered as they can vary $15-30/mt depending on grading & bagging charges, payment terms, freight rebates and the price paid for gradings.

Cotton values for 2016 this week hit $500/bale again and yesterday dropped back to $482. We expect $500 for 2016 will trade today with aggressive buying from merchants wanting to own market share.

AgVantage Commodities Market Report 20/01/2015

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U.S markets have been quiet this week as they have been closed due to the Martin Luther King Jr holiday. This closure has created a lack of direction, so many traders have been sitting on the sidelines until the market opens again this evening. The AUD/USD has also firmed, but at the time of writing, has slipped under $0.82 cents to $0.8185. Renewed Chinese buying interest for Australian sorghum, wheat & barley, has seen some support return to these markets. Current sorghum bids delivered Brisbane & Newcastle are back to around $312, where they had slipped closer to $300 last week, from highs of around $328. Sorghum 2 discounts are also available, along with the potential of obtaining a staining discount (SSOR) on a case by case basis. Please call us if you would like to discuss having a discount added to your contracted sorghum.

 Many are asking why the markets have been declining. Simply put, it’s a combination of declining U.S futures for wheat, corn, & soybeans, a firmer AUD/USD, & the simple economic notion of there being ‘more sellers than buyers’ over the last month. With the USDA report out last week, the market is clearly comfortable with global grain stocks, so as U.S futures decline, whilst Australian east coast is still at a premium, our base price also declines. We see value opportunities in current wheat & barley prices. Whilst we think sorghum prices are also good, we think there is more potential for volatility in the sorghum market as long as China remains a buyer, & the trade have to procure grain to execute their sales contracts, potentially resulting in ‘short covering’. Chickpea demand is waning, with many buyers covered for the short term. The strength in the AUD/USD has also stifled demand. Whilst we have been recommending growers sell into this recent rally for CHKP, we still think there will be firm demand for Australian chickpeas through to our new crop. The demand & AUD/USD will determine our price, but if we were betting people, we will see higher prices yet. This may not be until later in the year, post April….

 We have strong interest for old crop faba beans, with the last business done at $480 delivered Wee Waa for No.1’s, less $15 for No.2’s. We also have hectare contracts for mungbeans, with no minimum, or maximum tonnages required to be delivered, providing growers with production flexibility. Prices are very high for both spring & summer crop mungbeans, & by contracting, we can guarantee delivery at harvest, which can be peace of mind for such a high priced asset.

AgVantage Commodities Market Report 15/01/2015

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Chickpeas have remained volatile this week and what we are seeing is that the general demand has softened through the course of the week with India being fairly quiet (and now going into a 2 day holiday). There are also whispers in the market that Pakistan has pulled out of the market at present. In saying this, we are still seeing a $600/mt delivered Downs today for March/April delivery. We could move peas quicker than March/April but we expect a $5/month deduction for the cost of carry. For those holding out for higher prices, please keep in mind how volatile this market can be at times and where prices were back at harvest. The delivered Downs market was at $440-450/mt and then dropped lower, with the Narrabri bids sub-$400 for a period of time. A $150/mt rally is nothing to shy away from.

Durum demand remains quiet, with bids only for DR1 present, and sporadic. Yesterday a parcel traded at $514/mt at Emerald Hill but today there’s no interest. For anyone still holding DR3, there is no demand and the only prices we are being shown for these parcels is on a feed basis, $180/mt below harvest values for DR3!

Mungbean demand remains strong. We continue to contract hectares for the Summer crop, but for anyone harvesting soon that has unsold mungbeans, we suggest sending us a sample of the harvested product to price on a case-by-case basis as there are premiums for the Spring crop. These premiums haven’t spilled over into the Summer plant as there are much larger acres planted and the prospect for that crops is much better than the poor-performing Spring crop.

Although Sorghum values have dropped significantly, we still have demand for sorghum in all regions; Brisbane, the Downs, Newcastle, and local packers. Sorghum has traded this week delivered Narrabri at $280/mt with a $20/mt discount to SOR2. Given this grain will make it’s way to China, we don’t expect that much large volumes of tonnage will have a discount for SOR2 attached. The Chinese market demands good-quality and in-spec SOR1, with minimal staining and heavy discounts or rejections for poor quality or out of spec grain.

Faba beans have remained quiet since harvest but today we have traded Fabas at $480/mt delivered Narrabri/Wee Waa and a $15/mt discount to No2’s. For anyone still holding fabas and wish to discuss, please give us a call, we still have demand today.

AgVantage Commodities Market Report 13/01/2015

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Overnight the first USDA Supply & Demand Report for 2015 was released with no significant surprises. Global wheat was relatively bearish with increased production leading to higher ending stocks. However, new U.S. winter plantings were down, highlighting to need to “watch this space” as the crop emerges from dormancy in March/April. It was a slightly more positive picture for corn, as ending stocks tightened by 3 million tonnes, however, corn is comfortable for the time being. Soybeans & canola were also softer, with reduced concerns coming from Brazil which removed some of the risk premium priced into the oil markets. The 2014/15 world cotton production estimates showed small increases; from 118.98 to 119.17 million bales. Global consumption is reduced nearly 400,000 bales with China’s lowered by 500,000 bales as mills’ response to falling domestic prices continues to be sluggish and yarn imports remain high. World ending stocks are now projected at 108.64 million bales. Locally, some improved cropping conditions due to recent rains, a firming AUD/USD & the need for local basis to weaken to work in to the export market, have all conspired to pull prices back from pre-Christmas levels. Sorghum has been hardest hit, back around $17 on the delivered Newcastle market – $311 today with the high being around $328 last week. Sorghum 2 discounts are also available and we can also look at a spread to stained grain. Chickpeas are a sell in our view, as a stronger dollar, & weakening demand, is signalling to us that growers should be well priced on their chickpeas. We also have markets for old crop as well – call to discuss. We have homes for barley at the moment, whilst this demand has weakened slightly, it is still good value in our view. We also have good demand for high protein & off spec wheat. We can negotiate multi grade contracts for this type of wheat, which can assist with removing the cliff face spreads. We also have January demand for SFW wheat. For growers looking for cash-flow, this could be a good option, as many buyers are looking at contracting for March onwards, on a buyer call basis – this will significantly delay your payment.

AgVantage Commodities Market Report 08/01/2015

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Chickpeas today are  bid at $590/mt into Narrabri and $600 delivered Downs! Incredibly, this is another rally of $25-30/mt since Tuesday’s report.

APH1 wheat delivered Narrabri packer is $335, this is back $6 from prior to Christmas, with better than track values achieved delivered packers for any high protein wheat with screenings. SFW1 – 70/10 wheat is $332 delivered Downs. FB1 is bringing $318 delivered Downs – also steady. We encourage growers to consider pricing ex-farm as traders are still able to achieve some very attractive freight rates and we have had a number of growers comment that they would leave their trucks parked in the shed and take the ex-farm price offered. Of course, this is not always the case, but has occurred in a number of instances.

Summer crop selling is the focus for a lot of people at the moment and as always, we have a number of buyers for all commodities.

New crop sorghum is $314 track Brisbane and $309/mt delivered Downs today. We have discounts for SOR2 available at a $15/mt discount for a number of buyers, which is generally uncommon for this time of the season. Mungbeans are $1,200 for No.1 processing quality, $1,150 for processing, & a minimum of $1,000 for manufacturing quality. When considering marketing mungbeans, you should consider the total package, not only price. You should take in to account the price for the grade you are most likely going to produce – manufacturing/processing, along with the grading & bagging charges, grading losses, & whether you will be paid for your grading’s & at what price. The history of the grading facility should also be considered as some will be better than others. Grading losses can be the difference between profitable mungbeans & not!

Cotton today is at $493 for 2015 pick.

AgVantage Commodities Market Report 06/01/2015

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We’ve received some good falls of rain during the Christmas / New Year break and although a lot of regions would love to see more, we can’t complain about what’s already fallen. Domestic values in the north remain supported even on the back of this and we expect there will be/has been more sorghum planted as a result.

Chickpeas have taken a massive leap during the break and today are at $570/mt delivered Downs. These prices are for mixed delivery periods. For growers wanting prompt or even Feb pick-up or delivery, most prices are $10-15/mt below the above. Traders are working off a $5/mt per month carry from Jan through to April. We have delivery points into the Downs, Brisbane, Allora, Goondi, Moree, Narrabri, Wee Waa and Dubbo. These jumps cannot be attributed solely to currency moves as chickpea prices continue to jump while the Dollar remains steady. Pakistan had re-entered the market and we are expecting a decline in planted area and yield from the Indian crop, which won’t be confirmed until Feb/March. Fabas have remained quiet during the holiday break, but the export market has raised it’s head and we have demand for prompt delivery at $475/mt for No1 quality delivered Narrabri.

Cotton hit $500/bale just prior to Christmas and traded up to $10/bale above this between Christmas and New Year. Today it is at $500 for 2015 crop. We still suggest growers sell the rallies, and we have seen some selling through the Christmas break, when prices jumped above $500. 2016 prices today are $475/bale for anyone looking to price further out.

We are still looking to buy barley and wheat into domestic market delivered to a range of local destinations or ex-farm. With freight prices currently at very sharp rates it could be prudent for growers to give strong consideration to pricing grain on an ex-farm basis rather than delivered. APW $310 Ntl track south Narrabri and west to Nyngan. Delivered LPP SFW today is around $304 and Newcastle delivered $314/mt. We can also look at ex-farm pricing. Demand remains for high protein wheat delivered into Narrabri, with particular interest in off-grades, such as AUH and HPS.

As we all know durum demand and prices disappeared in the weeks after harvest, but we currently have interest for Durum into Newcastle – delivered. This demand is for export and predominantly DR1 but other grades can be priced on a parcel-by-parcel basis with price ideas for DR1 around $580/mt.

Sorghum values remain well supported and today are sitting at $314/mt delivered Downs, $285/mt delivered Narrabri and mid $320’s delivered Newcastle. We have a number of buyers who are keen to look at parcels and see offers as well. We also have a discount for SOR2 for forward contracts.

With recent rains there is still consideration being given to plant mungbeans now for April harvest/delivery. These prices have ranged throughout the season from $1150-1250/mt for No1 Processing quality and today are sitting around $1200/mt delivered. This is on a hectare contract with no minimum or maximum requirements for tonnage. There are a few bells and whistles and we have a range of delivery destinations and buyers available so we suggest giving us a call to discuss what options are out there. As always, the ‘best price’ isn’t always ‘the best price’, especially when you have differing grading & bagging charges, payments for grade-outs, freight rebates and payment terms.

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