Fact of the Day – The first “Super blue blood Moon” in 150 years will take place on the 31st of January, 2018. The moon will also be close to its nearest point to Earth, it will be totally eclipsed by the Earth’s shadow (So get outside and take a look on Wednesday).
With everything continuing unchanged this week in regards to the summer weather, the region has also faced extreme bush and grass fires to coincide with the current heat wave. The North West and southern Downs summer cropping areas have had zero respite from the harsh conditions with temperatures not seen below 35 over the past two weeks, and maximums exceeding the 43 degree mark along the border. Dry land Cotton and Sorghum plants are now deteriorating at a more rapid pace as top soil moisture disperses and summer takes its full toll. With ‘supposed’ rain on the horizon for February, the final week of January could be all but hot enough for said crops.
Sorghum has had its highs and lows over the past ten days, with fluctuations ranging by up to fifteen dollars. The price is predominantly being driven through market factors such as the approaching harvest and poor conditions the prime growing areas are currently undergoing, but planted hectares are faring well in parts taking in to consideration the season we are having. Delivered prices reached a comfortable high of $297 at the start of the week in to Brisbane and now sit at $290, where delivery in to the Darling Downs has softened to $275/mt. Feed Wheat and Barley remain hand in hand as the market takes in to account the domestic demand throughout these warmer months and are priced at both $325 delivered Downs for February and March. Old and new season Fabas continue to be chased for the coming months, ex-farm prices are ranging from $255-$265 depending on location and subject to enquiry.
Chickpeas, once again the danger word to end an already volatile month. As we watched prices slip between the markets fingers to start the year, reports of increased demand in to Pakistan due to concerns with their own season has given prices the perk growers have been looking and waiting for. With this demand having the ability to lower as fast as it can rise, there is no forward knowledge at this time of which path the already erratic market will take. Prices today have dropped on their most recent high down to $670 in to Brisbane port, $650 delivered Downs and $630 in to Narrabri packers.
Cotton has held its own at a higher price just up until the middle of this week where we saw a decline. With bale prices this year soaring to a peak of $575 and $535 for 2019, the pricing has now softened due to the futures market flow and a strengthened Aussie dollar. As mentioned previously, only solid rain will alleviate the critical stunted growing areas, though this is forecasted on a very unlikely basis. The AUD has risen to and is sitting comfortably at the $0.80 (at time of writing) mark as opposed to a weakening greenback.
Fact of the Day – With the US just celebrating a very historical public holiday on Monday, George Washington is the only other American to have had his birthday observed as a national holiday. In 1983 President Reagan signed off on a federal holiday to honour Martin Luther King Jr, it was first commemorated in 1986, it is celebrated on the third Monday in January.
Though summer is more than showing its strength, the week ahead is looking to be the pinnacle of the season thus far. With the next 6 days all forecasted above forty degrees and no substantial rain expected till February, crops that have hung on this long will definitely be in dire straits for the remainder of the month or until we see some respite. For now on a climate perspective there is not much good news. On the other side of the Pacific, they have faced this brutal cold across the main growing regions but look to be rewarded with heavy rain across the mid-west over the coming weekend. As most have only really just comprehended the USDA WASDE report due to the close on Monday with a holiday, most markets were driven through the week by local currencies and the report itself.
H2 Wheat still carries its strength at $340 delivered Brisbane and $290 in to Narrabri with demand picking up for the prime hard variety’s as well in to local packers. Sorghum still is hot topic with prices firm for all delivery areas due to the current weather conditions across NSW and QLD and approaching harvest. Delivered prices for Brisbane are at $290, Darling Downs $276, Narrabri $250-55 and the Newcastle Port zone $285. Barley is running hand in hand with feed Wheat as of late and is comfortably around the $320 level for Downs delivery and $295 in to the Liverpool Plains. Old crop Faba beans are $250-55 Ex-Farm depending location and subject to enquiry, with the higher grades for export just under $300/mt.
Chickpeas have halted their rapid decline for now, especially with reports that the Indian crop may not be progressing as nice as first thought. Bangladesh and Pakistan’s appetite seems to be on the move, though there is still is some room for change with Harvest nearing in the sub-continent as well as Ramadan (Religious fasting) commencing in mid-May. Pricing coming in to this week are sitting at $590 delivered in to the Downs and $580 in to the Narrabri sites (at time of writing). Demand is still floating around for delivered and Ex-Farm markets though in the system and warehoused product is not specifically sought out for now.
Cotton saw a large jump late last week with futures soaring to a seven month high. Though since then we have slowly seen the Aussie dollar trickle higher which is softening the price for most commodities. As the start of the year has been extreme in regards to heat stress, the main growing regions will still struggle, especially for the next extreme 5-7 days. Bale prices have lowered since their $570-75 high and sit today at $555 for the season ahead, $530 for 2019 and $505 for 2020. As stated above the AUD is relatively stable for now at $0.799 (at time of writing).
Fact of the Day – With the Australian Open to commence next week, the fastest serve in men’s tennis came from the racket of the Australian Sam Groth at a speed of 263.44 km/h.
Continuing on from last week’s comment, the heat is still the main contributing factor over the current summer crops deterioration. Forty degree temperatures have spanned across the state from Southern NSW all the way to the Queensland border, with western Sydney classified as the hottest place on earth at 47.3 degrees Celsius on Monday. With storms rolling around the North West, nothing seems to be eventuating except for some rattling thunder and lightning, but no rain what so ever. The Downs experienced some relieving rain over the festive season in parts but for now the whole region is in dire need of some respite and moisture to get through the harsh conditions January is bringing to the table.
The gap between the protein and feed market is continuing to narrow over time, though it is the feed market staying firm and the protein slowly softening. With this said, the demand for feed and protein Wheat is still very much there, especially around the Liverpool Plains, Darling downs and port zones. H2 Wheat remains strong at $340 delivered Brisbane and $290 in to Narrabri packers for prompt delivery. Sorghum prices have slowly been on the rise since the New Year, for March/April delivery in to the Downs prices are just on the $275/mt mark with Brisbane prices very firm at $290/mt. Barley continues its partnership in pricing with feed wheat, both sitting at the $325 level for February in to the Downs and $295 for both commodities in to the Liverpool Plains zone as well. There still remains significant demand for ex-farm product as well for feedlots and graziers throughout the region. Faba beans from the 16/17 season are still sought after and have not moved and abundance price wise over the last fortnight. Prices are around $250-55 Ex-Farm depending location and subject to enquiry.
In the last week the Australian Chickpea market has declined at a moderate rate. In just over a week prices have dropped roughly around $100/mt. The market is still recovering from the import tariff imposed just before Christmas and is very volatile and there is still a large degree of uncertainty. Downs pricing stands at $575 delivered whilst Narrabri prices sit today at $545/mt (at time of writing). The buying demand is very low but not completely gone, there are some shorts in the market but pricing will be the biggest deterrent for now.
With the Aussie dollar today just lowering itself, it is still in parity to where it stood this time last week at $0.782. This alongside rising futures has bumped Cotton prices up during this heatwave being faced across key growing regions in the North West and Southern Downs. Bale prices are at $550 for 2018 and $520 for the 2019 season (at time of writing).
Fact of the Day – In February, the Winter Olympics will begin in PyeongChang, South Korea at an estimated cost of a record $12 billion. In order not to be confused with the North Korean capital Pyongyang, PyeongChang has changed its spelling, capitalising the C in its name.
As we enter 2018 (The year of the Dog) coming back from the festive season, we are quickly brought back to reality of the harsh conditions summer crops have been facing for the past three weeks. Now, the heat is not as relentless as this time last year, though a lengthy continuation could prove costly even with the slightly decreased temperatures. The thermometer has been flirting between the 35-40 degree mark which is starting to take quite the toll on dry land Cotton and Sorghum across the region. With the next fortnight looking grim rain wise, the best hope is a cooler change for some well needed respite, and not just only for the crops. Looking to the cooler part of the world, the US are facing quite an aggressive freeze. This is creating speculation about winterkill across the main growing areas of the Midwest and Plains. The crops stateside, much like ours are well overdue for some rain, moisture during this time is critical as the plants are evolving out of their dormant period (when progress, development and physical activity are briefly stopped to preserve energy in intense climates).
With a remaining two months of summer to go, feed demand is holding up prices from where the market sat at the end of last year. Feed Wheat for January delivered in to the downs still remains firm at $320/mt with Barley five dollars lower at $315/mt. Sorghum will start to falter with these high temperatures and no replenishment of moisture forecasted across the Liverpool plains, North West and Darling Downs. For early delivery in February of new crop sorghum in to the Downs, the market floats at the $275 level with Newcastle delivery in April at $270/mt. Faba bean demand for new crop continues as domestic demand for old season looks to have softened over the new year’s period, though still expect to see prices around $250 Ex-Farm depending on location and subject to enquiry.
Chickpeas, after weeks and weeks of uncertainty and speculation, accompanied by falling prices, they finally did it, the Indian government imposed a 30% tariff. Obviously the tariff is their so the expense of importing in to the sub-continent is higher and the competitiveness is given back to the Indian grower, though it does throw another metaphorical spanner in the Australian works. As the year takes off, the market is looking to gather all the information and move forward, though with contracts in place and prices altered it does prove difficult for most exporters at this time. For now prices delivered in to the Downs are at $630 for January (At time of writing), though how the market repairs itself is yet to be seen with which direction prices take. With India having an above average season ahead and quality looking the part, their harvest in the next 4-6 weeks is going to take away the focus from Australian Chickpeas for at least the next couple of months. Stay tuned, more to come in the next week as!
The Cotton futures rolling in to the New Year have had a climb, though this has been stalked closely by the rising Aussie dollar, this has kept bale prices firmly at bay for the last 2-3 weeks. Bale prices have dropped by a few dollars since the start of the week due to the exchange rate and settled today at $545 per bale with 2019 crop at $510. The AUD/USD since the end of 2017 has made gains and today opened at $0.782. (At time of writing).