As we are quickly approaching the downhill run of 2017 with only a couple more days left of June as well as the financial year, this has brought a predicted forecast of some welcome rain around Northern NSW (NNSW). Today the forecast is projecting a nice change of 20-40mm but I wouldn’t suggest holding your breath just yet. Here’s hoping it hits all the right places, which is pretty much the whole region at the moment. The weather as of late has had a lesser winter impact on the area with days heating up to the mid 20’s, though the weekend ahead is showing a bitter change which is sure to bring a nice welcome to what seems to be a chilly July ahead. In the US the rain like usual has typically evaded the thirstiest parts, this increases the impact of pressure on the pastures and winter and summer crops, even though the temperatures have been lower.
Modifications in USDA crop progress report were reassuring of the offshore markets helping the prices stay in the green despite the slight drop on the good to excellent rated crop. Feed Wheat for January 2018 remains at the high it climbed to last week at $300/mt delivered Darling Downs. Prompt bids at the moment stand at the high $285-90’s. F1 feed Barley has again kept slowly climbing over the past week bidding at $5 higher at the $275 mark. Sorghum, continues its firm rise hitching a ride upwards with the Wheat and Barley prices, the bids seen delivered Downs are stronger at $275-80/mt for August 2017. Chickpeas continue their sub $1000 levels from earlier in the month and have kept firm at $950/mt delivered Narrabri, or $965 Darling Downs for July delivery. Ramadan has now come to a conclusion and we sit, watch and wait to see how the market reacts in regards to Chickpea demand abroad. 2017/18 chickpea bids have fluctuated minimally and continue generally unscathed currently at $800 delivered Oct/Nov Narrabri and $850 Darling Downs for September and early October delivery. Faba beans have had some activity in regards to Ex-Farm parcels, though there is still not enough of a firing market to warrant a large lift in price out of the blue just yet. Values such as $205 Ex-Farm around the Narrabri/Moree area and $210 Downs seem to be as exciting as it gets for time being. 2018 multi grade APW NTP Newcastle has showed its worth and lifted $5 this week and bidding firm at the $290 mark.
Cotton has remained at its low from the previous weeks fall. Prices are not much to jump up and down about but continue reasonably strong at $525/bale for current crop, with new crop for the 2018 season at a mark of $495-$500. The US Dollar was more solid alongside majority of the further agri‑exporter currencies early this week. The Euro has come to the forefront of the exchange rallying up to its peak level since August 2016 and the AUD/USD continues to hold its place at just over the $0.76 level.
Yesterday brought the Southern Hemisphere’s winter solstice, marking the day with the shortest period of daylight, the longest night of the year and cementing that the cold dry winter has well and truly arrived. The eastern side of Australia continues to be substantially dry with no rain forecasted, for Northern NSW the outlook is dismal for any expectations of moisture, which in fact could prove detrimental in the coming months. In regards to the current climate conditions in the US, weather events across the mid-west have been given a dousing of rain that will impact top soil moisture positively to a certain degree despite the heat that has been drying out the central Corn Belt significantly. European conditions have been somewhat hidden from recent news, though Western Europe’s production levels continue to battle the heat for the remainder of the week before hopefully receiving some forecasted respite. To sum up the weather across the globe, anything and everything is expected across the board from forecast to forecast.
Wheat has continued with its positives from last week remaining substantially high price wise. Feed Wheat for January 2018 is quite enticing with bids at $300/mt delivered Darling Downs. Prompt bids at the moment are low $290’s. F1 feed barley has jumped up by $10, now sitting with bids at the mid $270 mark. Sorghum, as like previous trends is stalking the Wheat and Barley prices, the bids seen delivered Downs are strong at $275-80/mt for June 2017. Chickpeas remain to be steadily lowering further from last week with prices showing below the $1,000 benchmark for the first time in a while at $960/mt Narrabri, or $985 Darling Downs for July delivery. As spoken previously, the fasting period for Islam in which is Ramadan, concludes this coming Saturday. This being said, the finish will hopefully lead to an increase in demand across the export market as the religion constitutes 25% of the world’s population. New crop chickpea bids remain untouched currently and are around $800 Narrabri and $820 Darling Downs for October/November delivery. Faba beans are still an upsetting subject with the market continuing to settle at values such as $200 Ex-Farm around the Narrabri and Moree area. 2018 multi grade APW NTP Newcastle is still bidding pleasantly around the $280-$285 point.
Cotton has again slowly decreased its prices this week. Prices have dropped to some extent as of late to around $520-25/bale for current crop, with new crop 2018 taking an upsetting plunge and hiding just under the $500 mark at $490 to $500/bale. The AUD/USD has had a calming week with the rate just sitting shy of the $0.76 spot as mid week hits. Agri‑exporter currencies are generally undulating off their latest peaks. The AUD has shadowed this trend.
As we are closing in on the middle of 2017, the north eastern side of Australia is in the midst of a cold dry winter currently with not much moisture forecasted for the near future. As of where we stand this month, it seems a very much a wait and see situation. This can be said also for the U.S. spring crop, while particular areas have been privileged to some rain as of late, at the current time it seems to be a bitter sweet scenario with the rain falling at just the wrong time where it will not really provide any real benefits to the crops. The USDA report this week has reported that the winter wheat is doing very well on average yet the spring wheat condition is very dismal dropping significantly below the five year range.
With a tour conducted around the north west of the state just west of Narrabri to Walgett yesterday there was much to take note of. Whilst an estimation of 75% of the area has been planted (the further west from Narrabri the less this precent is), it certainly needs some watering. There has been a swing to chickpeas in the more western areas due to lack of moisture. The Walgett shire is largely unplanted, with some better areas east of Walgett such as Cryon and Rowena. Therefore, to summarise, the cereal crops that are in have potential but will need rain this month. Chickpeas will hold on that little bit longer as they don’t draw much moisture until August/September. This region is of interest due to the protein issues in the Spring wheat regions of North America. If northern NSW (NNSW) dose not have a good season, this will remove a large amount of prime protein area & therefore the supply of protein wheat from Australia, magnifying the protein deficit around the world. Whilst southern NSW is in better condition than NNSW, a dry season in NNSW, will only add value to southern NSW grain values as the strong domestic demand from NNSW & SQLD forces the drawing arc south, resulting in less quantity of SNSW grains available for export. Whilst you never write off an Australian crop in June, many eyes will be monitoring this situation to August when many will make their minds on crop potential – what this space!
Wheat has had an exciting week with prices starting to climb in an attention grabbing way. January 2018 Feed Wheat has spiked by $20/tonne from the $270 to $290 delivered Darling Downs. Prompt bids are low $280’s. Prompt F1 feed barley is also up at the mid $260’s. Sorghum is again partnering closely with Wheat just trailing behind by a few dollars, the bids seen delivered Downs are around the low to mid $270’s for June 2017. Current crop chickpeas have dropped a further $10/t this week showing prices at $1,000/t Narrabri, or $1,020 Darling Downs for July delivery. With only a couple of weeks till the end of Islam’s fasting period of Ramadan, we are optimistic that demand can return. New crop chickpea bids are around $800 Narrabri & $820 Darling Downs for October/November. Faba beans have remained sluggish with values at $200 Ex-Farm around Narrabri & Moree. New crop multi grade APW NTP Newcastle is biding attractively around the $280 position with no sellers.
Cotton has dipped steadily over the past week, as the market fell over the long weekend it had been forecasted to do so and thus most were prepared. Weather isn’t projected to play much of a role in the futures market in the supply of cotton for 2017. Prices dropped slightly to around $530-40/bale for current crop, with new crop 2018 holding steady at $520 to $525/bale. The AUD/USD is holding its own this week remaining just over the $0.75 mark.
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.
Red was the colour to be seen through the board in offshore markets overnight with CBOT wheat, corn soybeans and ICE canola markets all concluding lesser. Positive weather conditions across the US Corn Belt positioned CBOT corn values under stress overnight. The USDA’s crop progress survey proposes planting is on track and, more importantly, is getting close to completion. With the harvest of the US winter wheat crop is closing in, this puts a lot of expectations on the US Wheat values as well. Cotton prices were little changed on Tuesday. December Prices were roughly in the 72’s and then changed direction as the day progressed. The USDA reported that cotton planting is largely on track.
Durum has continued in its strength with recent bids around $300 Ex-Farm on the plains less $50 for DR2. Wheat is persistent in bidding at $280 for APH2 delivered Narrabri. Demand remains firm for protein wheat delivered Narrabri – H2 $240, H12 $250 & AUH14 $270, with protein & screenings wheat – HPS14 $240. Barley is also neutral to firmer by $2/tonne around the mid $240’s delivered Darling Downs and $220 delivered Liverpool Plains.
Sorghum is holding neutral to firmer by $2/tonne at $257 delivered Darling Downs and Newcastle. We have been achieving prices for sorghum 2 at around $8/tonne over published bids. Chickpea prices on an export spectrum have quietened down since the commencement of Ramadan which takes place over the next four weeks. Though prices delivered Narrabri still remain positive with bids at $1,050 for current crop and 2017/18 crop bid around $810. Faba Beans are making its steady presence known but nothing to get over excited about with bids at $190-$200 Ex-Farm depending location.