AgVantage Commodities Market Report 30/11/2017

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Fact of the Day – Carrier pigeons beat internet upload speeds up to as late as 2010. They actually sent pigeons over with USB sticks the same time they started uploading a video over broadband, the pigeons won.

Just like October, December looks to be off to a wet start with solid rains forecasted for the North West and Southern Downs. With the majority of the fall set to arrive Friday, the days leading up are expected to provide rolling showers accompanied by the odd summer storm. With the majority of harvest now over, the rain is a welcome change of scenery and temperature when reminiscing on the December faced across the region last year. There is still an amount of Chickpeas looking to be stripped over the next couple of weeks heading more east of the Newell, though with the weather predicted this will increase grower frustration and crop quality. The markets stateside have now shown a bit more gusto this week after no real direction was seen due to the Thanksgiving holiday. The US winter crop is struggling considerably and there doesn’t seem to be much respite coming anytime soon. The condition has been re-evaluated and with no wet relief in the short term the plant progression will continue to be dismal.

Now that November has come to an end, the main focus looks to grain over the December/January period for feed Wheat, Barley and Sorghum. With the large amounts of rain also predicted throughout southern New South Wales, the quality may be affected considerably and this could impact the NNSW and SQ markets through increased deliveries as the bulk of northern Wheat went to the protein markets. As domestic demand still remains strong through the delivered and Ex-farm markets, now is the time to start laying out your own schedule for grain movement leading in to the next 2-3 months. As the festive season can be very stop and start in regards to office and site closures, it is best to have delivery periods and contracts organised to keep cash flow steady to accommodate this busy part of the year and move in to 2018 on track. Prices remain firm to what we have been seeing as of late for feed wheat with prices for January at $325/mt delivered downs through to April. Sorghum has been fluctuating lately with the weather experienced being the major factor, Downs pricing is floating around the $255-60 level for March and for delivery in to Narrabri prices sit close to $240.

With no word passed down the Indian Chickpea grapevine as of yet, there is still some uncertainty and worry floating around the topic. We are looking to learn more day by day, but for now whilst the dust is yet to settle, growers and buyers still want a certain degree of assurance before committing to any contracts alongside a higher price of course also!! Narrabri prices have taken a drop bidding at $680/mt with Darling Downs just twenty dollars above at $700. We do advise firstly before looking to the marketing side of your peas to make sure the quality is there. If product does fall out of spec it can be costly in regards to replacement tonnages and washouts. The volatility of the market still remains for now too.

Cotton futures had a positive gain earlier in the week in which continued the strong month of November we have been reporting on. The picking season looks to still be making good progress across the main growing regions going in to December. This week with the weakening Aussie dollar and strengthened futures market, bale prices have had a healthy rise. The Australian dollar has been teetering on the $0.76 mark over the past couple of days and remains their again today. 2018 bale prices sit around the $550 mark with 2019 at $525 (At time of writing). With the forecasted rains mentioned earlier set to hit the main growing regions, with enough this will replenish the lost moisture and soil conditions that have diminished over the past few weeks.

AgVantage Commodities Market Report 23/11/2017

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Fact of the Day – The “First Thanksgiving” was celebrated in the United States by the Pilgrims after their first harvest in the New World in October 1621.

With the North West and Southern Downs having faced a rainy weekend, it has brought more of a bitter sweet sensation for some depending on which side of the summer/winter crop fence you are standing on. For growers just having finished planting Cotton and/or Sorghum, the weather brought solid soaking rain dropping in areas of 35mm at Narrabri, 65mm in Gunnedah and 45mm for parts of the Gwydir valley. For the remainder of growers still looking over paddocks of unstripped Chickpeas, the fall just elongated their harvest and increased worries of further progression with more rain set for next week. On an international scale, the US markets look to remain quite placid this week as the nation is set to celebrate their Thanksgiving holiday on Thursday followed by the well renowned Black Friday sales.

With the 2017 winter crop harvest stretching from Queensland south to Narrabri all but over, we suggest looking to what quality and quantity is stored on farm and at local depots and making some small time decisions on a marketing front before the festive season. As protein wheat remains lower then peak harvest time, there is still significant demand for the higher protein grades delivered in to the packers and/or in the system. For feed Wheat, we are still seeing the price gap narrow between the protein and feed markets, this shows us that the domestic demand is still strong and feedlots are looking for tonnages heading in to the New Year and over the summer period. Feed Wheat in to the Downs is much unchanged from last week and for prompt sits at $320/mt with January delivery around $325. Continued forecasted rains seem to be fluctuating the Barley market again this week, though a small spike has seen prices at $318 for a New Year delivery in to the Downs. Faba’s, old crop is still in demand for pick up before Christmas and remains at $250 subject to location and $300/mt is still the best price for new crop delivered Narrabri.

From where we commented last week, not too much has changed on the Chickpea front. We have seen the speculation and uncertainty ease up though there is nothing set in stone for now in regards to future tariffs and Indian intervention. We hope to see this event calm down as the dust settles and Australian traders get on the same page as those on the sub-continent. Prices are still not where they were at the start of the month, though as stated there is still a little bit of uneasiness which has forced buyers to tread carefully this week too. Prices in to Narrabri are floating around the $725 mark and $745 delivered Downs subject to confirmation as the market is still quite volatile. Hope to have more conclusive and concrete findings come next week, stay tuned!

The US Cotton harvest is now three quarters of the way through according to data from the USDA and also above the average pace on previous seasons. For this week the futures market has rallied by 12% for March 2018 contracts and this has seen bale prices reach levels enough to tweak some interest for most. Cotton Futures are also looking to be on track for another successful November period. 2018 prices had a rise to the $535 mark earlier in the week and today sits at the $530 mark with 2019 at $510. Weather conditions over the next two months will be very telling with the bureau of meteorology expecting the La Nina formation to not exceed average rainfall levels this summer. The Aussie dollar has slid down this week though made a slight recovery last night and sits at $0.762 (At time of writing).

AgVantage Commodities Market Report 16/11/2017

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Fact of the Day – On this day 70 years ago the great Sir Donald Bradman scored his 100th first class century. In all, ‘The Don’ scored 117 first class centuries in 338 innings.

Throughout the week across Northern New South Wales, the prevalence of truck after truck hauling harvest equipment south has been one, quite informative and two, nostalgic. Why? Mainly because it means harvest 2017 is nearly all wrapped up for the year and we can now change our focus to the summer season and 2018 planting. Throughout the week conditions across the area have been at maximums of 30 degrees with quite cool nights and a wet change set for over the weekend. The Narrabri and Moree districts are expected to receive around the 30mm mark, with bigger falls forecasted across the Walgett shire and the Liverpool Plains. Looking across to the US, winter Wheat struggles amidst the growing concerns of dryness at this crucial development time and the coming winter’s low temperatures could also wreak havoc on early staged crops. The winter Wheat is roughly 95% planted and looks to conclude by the end of the month.

Feed Wheat demand continues to be of interest as stated last week due to the significant amount of high protein grain seen this season. Prices delivered Downs for the New Year are floating around the $325 mark with carry costs through to April and five dollars less for prompt delivery in 2017. Barley has plateaued out slightly and is looking at the $312 mark delivered Downs November with a Narrabri delivery price around $280/mt. We do see the F1 market to soften a little over the coming days with the expected weather forecasted for the North West and Southern Downs. Faba Beans, no change, which means there is still a substantial amount of demand for 2017 pick up at $250/mt subject to location and $300 for new crop delivered in Narrabri.

Chickpeas… what a roller coaster thus far. Late last week we saw the Indian government announce a 50% import tariff on field peas whereas the current import tariff on wheat was also elevated from 10% to 20%. For now this has created a large amount of speculation on whether this will follow on to Chickpeas and/or Lentils down the track. Regardless of the market (Housing, Financial) when there is a large degree of uncertainty the general consensus is to sit tight, watch and not become to invested during the volatile period. The Chickpea market has been affected by this and many buyers, traders and growers are doing the same. Prices seen on Monday of $800 delivered Narrabri have come back now to between the $720-$750/mt mark (At the time of writing). We expect to learn more throughout the remainder of the week, though with government intervention on the Sub-Continent it is quite a heavily fluctuating market.

The Cotton market has remained quite static for now since the US Department of Ag released the WASDE report late last week. The report stated that there didn’t seem to be a huge worry about the freeze affected bolls across the main southern growing regions as it appeared much less than first estimated. As the US picking season is to kick off, the Australian crop comes in to play with the international market looking to be informed on our plant progression, moisture levels and upcoming weather events for the remainder of 2017. With the drop of the Aussie dollar and strong Cotton futures we have seen bale prices move freely between the $510-20 mark the last couple of days. Today 2018 prices sit at the $515 mark with 2019 at $501. As our dollar today is just over $0.76, the greenback fell up against the Euro, though still chasing those monthly highs we have commented on as of late (At the time of writing).

AgVantage Commodities Market Report 09/11/2017

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Fact of the Day – The largest ever attendance for the Melbourne Cup was in 2003, when more than 122,737 people attended to watch Makybe Diva win her first of three Melbourne Cups.

With the races that stops a nation doing exactly that for another year, there were still headers powering through what is left of the northern New South Wales 2017/18 winter crop. Looking over the progression of harvest this season, we feel that about 85% of the cereal grains have been stripped from the Darling Downs south to the Moree and Narrabri region. With most now focussed on the remaining Chickpeas, roughly 50% of the pulse crop has been harvested around the North West with the majority of western growers having a very disappointing yielding season. Monday brought quite an aggressive weather event through the North West and Liverpool Plains with many growers copping golf ball sized hail and strong winds. From early reports it seems the storm was more of an inconvenience than anything else damage wise. The market seems to be quite steady for now with the US Dept. of Ag WASDE report due out later today.

On a quality point of view across Southern Queensland and NNSW, we have generally seen a large amount of high protein Wheat coming through the receival sites. The average protein percentage would be around thirteen and higher with most tonnage falling in to the APH1/2 specifications. Low screenings have also been quite prevalent with it being a rarity to find parcels teetering above 5%. With the bulk of Wheat flowing in to the export market, we are starting to see some shorts in regards to domestic demand, this is also being reflected in pricing for APW and SFW grades. F1 Barley has been coming off fairly well also with many only having trouble with the yield quantity for now. Many growers are quite proud to be owners of Barley tonnes and look to hold for the short term. Barley in to the Downs is at the $315 mark delivered November with a Narrabri delivery priced at $280/mt. With the Sorghum planted throughout the past couple of weeks, even though there was an abundance put in the ground we will still need some strong follow up rain over the next 6 weeks to cement the estimates of a two million tonne crop come the new year.

We do realise we sound like a broken record on the topic of Faba Beans, though there is still demand, especially for old crop moving in to the December and January period. As stated in previous weeks, with such a low quantity season, many buyers still are very interested in the beans still yet to be shifted out of storage. Ex-Farm tonnage still trading at $250 subject to location for domestic demand and $300 for new crop delivered in to the packers in Narrabri.

The Chickpea market has been showing signs of strength over the last few days, whilst bids remain sub $800 around Narrabri, AgVantage is achieving better prices with offers. The Darling Downs has also been bid around $790 to $800 delivered, but we have seen it trade at $830 for prompt delivery. We are seeing a bit more strength in demand from buyers as many growers have stored their tonnage and look to see where the market stands over the next two months. We still remain with last week’s advisement of “not looking to sell unless there is an eight at the beginning, thus storing on farm and warehousing is a viable option as yield is much lower than first estimated”. Quality seems to have been quite good from the border south to the Narrabri growing zone. In the next two weeks we expect the remaining peas to be coming off and harvest really to be finished up for another year come the end of the month.

The Cotton futures have fallen just slightly over night though still very placid as it awaits the WASDE report this week which will evaluate the freeze damage faced over the main Cotton producing areas. The slight dip in futures have put bale prices for 2018 at the $505 mark and 2019 at $500. The USD has strengthened over the past few days of trade and is set to break the mark for a three month high. The AUD dollars remains barely unchanged for the day at just over $0.765 (At time of writing).

AgVantage Commodities Market Report 2/11/2017

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Fact of the Day – If you could fly a plane to the planet Pluto, the trip would take you more than 800 years.

As November has arrived and harvest is in full swing, we have a much broader perspective on progression through crops across northern New South Wales (NNSW). As we are now in the last month of spring, the increasing temperatures and afternoon storms are becoming much more prevalent. The heat paralleled with strong winds are beginning to accelerate many of the crops development yet to be stripped. With forecasters expecting rain later this week and flowing in to the weekend, this will keep up soil moisture levels for summer cropping but also has the potential to throw yet another ‘spanner in the works’ for most harvest schedules throughout the North West. Poor reports have come out of the US with the Dept. of Ag recording that of the winter Wheat planted just over half is at “good or excellent” health condition. Even though this is only preliminary and the first reading of the crop, historically it is still stunted going off the five year average. Temperatures are also running well below across the American Plains and Midwest, after the weekend faced across the southern states also, there is a warmer front set to arrive in the coming days to bring temperatures back to bearable. This will alleviate concerns for winter Wheat and southern Cotton parts.

As we covered last week, protein Wheat has continued its run as more high protein grain is being delivered in to packing sites around Narrabri and Moree with very few having trouble with screenings. Even though there is a much lower yield this season and cases of shot and sprung grain due to the moisture, the higher protein seems to be the silver lining for most. Looking from Central Queensland south to the downs the general consensus is that quality wasn’t perfect with lower yields, frost damage, soil/admix and immature seed sizes setting the pace. At this time we see it much more beneficial to be delivering in to packers for higher quality Wheat rather than in to the system. Obviously there are other contributing factors that affect growers individually such as freight rates and turnaround times for unloading but all definitely viable for at least some consideration when pricing your grain.

Site Location and Grade

Delivered to Packing Facilities

Delivered Site in the System

Narrabri APH1 & APH2 & H2

$330/$320/$300

$307/$300/$276

GF Bellata APH1 & APH2 & H2

N/A

$330/$307/282

Moree APH1 & APH2 & H2

$331/$324/$316

$304/$297/$268

Summer crops (Sorghum, Cotton) are going in to the ground in great quantity now due to the late rain received throughout October, Sorghum is still a little soft for now due to the increased planting area across the NNSW and SQ and we have seen this reflected in pricing over the past four weeks. Faba Beans were off the paddock before most realised, it was a short and sharp season compared to previous years though demand for new crop in to the packers is still fetching the $300 mark less twenty dollars for grade two beans. As touched on there wasn’t a large crop this season, soon as most high quality tonnages have been packed away, all eyes will return on the 2016/17 season beans for domestic use and there does still seems to be a significant amount still in storage.

As the temperatures begin to rise, the paddocks of peas around NNSW are set to turn and be ready for harvest this week and next for most. Chickpeas at the moment are not as positive as they were ten days ago. We have seen prices soften as of late due to the lowered demand and the considerable crop on the sub-continent, though with more growers looking to hold off on selling, packers will be looking to fill orders creating a short term rally to get the grain in to sites. Delivered Narrabri prices are $790/mt with the Downs at just ten dollars more for November. The price in to Narrabri though not as strong as previously, is still at a premium of around twenty to thirty dollars to what is seen in the market today. For the time being we would advise not looking to sell unless there is an eight at the beginning, thus storing on farm and warehousing is a much more viable option as yield is much lower than first estimated.

The Cotton futures have been paralleled last week and in to this week with the weather across the US southern growing states. As the regions copped a hefty freeze of temperatures over the weekend, reports are hazy on damage to the bolls but nothing to detrimental seems to have been addressed for the time being. The USD has strengthened along with a slight dip in futures putting bale prices for 2018 at the $508 mark and 2019 at $493. The Aussie dollars remains barely unchanged for the day at just over $0.765 (At time of writing).

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