AgVantage Commodities Market Report 01/3/2018

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Fact of the Day – When Louis Braille entered the school for the blind in Paris, in 1819, he learned of a system of tangible writing using dots, invented in 1819 by Captain Charles Barbier, a French army officer. It was called night writing and was intended for night-time battlefield communications.

As the cruel season that was summer now comes to its calendar end, the last week saw a fantastic fall of rain for most parts around the North West and Southern Downs. With the smallest showers just dusting growers over the weekend, the biggest falls were seen in Moree (80mm), Walgett (50mm) and the Liverpool Plains (40mm). Narrabri and the border regions did receive scattered showers but nowhere near enough to impact soil moisture. For now, Cotton is doing its best to hold on going in to autumn with as much optimism as possible for a wetter March/April. The European Wheat market is being heavily influenced by one, the CBOT and two, the artic conditions being brought across through strong winds blowing off the Siberian plateau. Concerns in regards to the US and South American conditions are also playing a role in firming the markets as of late.

March is now upon us and most of the Sorghum is now off the paddock in Queensland and the NSW crop is now steadily coming in to the receival sites across NNSW. From a quality point of view, there does seem to be some issues with higher screenings due to the gruelling last two months experienced, though overall the grain is fairing quite well as focus shifts to the crop development further south on the plains. Delivered Sorghum is very strong as of late due to the contributing factors of weather and domestic/international demand, in to Brisbane prices are fetching $325, Downs $310, Narrabri $292 and Newcastle $325. Feed Wheat and Barley have dropped away over the last 10 days by about five to six dollars, but still firm at the $332 mark. Faba’s continue their demand and price climb as more and more graziers/feedlots look to stockpile for what looks like a dry winter for now. Ex-Farm feed Faba’s are priced at $290-95/mt subject to enquiry and depending location.

The Chickpea market has come back about thirty dollars since Friday last week. This decline doesn’t seem to be a supposed trend of where it’s heading, but more of a calm before the inactive few weeks ahead. As mentioned previously, with the main harvests underway across India, Bangladesh and Pakistan, the Australian market is waiting to see the quality and quantity produced before anything escalates, as well as the fast approaching Ramadan. At the start of the month Pulse Australia headed to New Delhi for the Pulse Concave. What we saw come out of this conference was “a rise in output over the last couple of years, record imports, and a large government buffer stock are keeping markets well-supplied and local prices depressed. We must assume that as a result, India will sharply reduce imports of pulses this year”. The sub continents imports are also set to nearly halve come April due to a healthy inventory and government intervention. Prices are reflected through this lull in buying demand and low selling interest. Darling Downs this week has fallen to $610 and $570 for new crop, and Narrabri sits at $580 for March/April (At time of writing).

Cotton has seen modest gains over the last four days, the market squeeze is clearly boosting prices along with global supply uncertainty coming out of the US. Bale prices soared yesterday with 2018 Cotton hitting $585, 2019 $555 and 2020 at $525. Plant development locally for now is under severe pressure, the long stints between drinks and blasting heat has taken its toll on the crop with the last rain just possibly delaying a final knockout heatwave that could break the season.The AUD finished with a slight gain yesterday and today sits at just over the $0.78 mark.

AgVantage Commodities Market Report 22/2/2018

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Fact of the Day – No single hour in any other country sees as many fireworks lighted as in China around midnight beginning Chinese New Year. China produces about 90% of the world’s fireworks. Fireworks are used to scare evil spirits, most mainland Chinese believe that the flash and bang of firecrackers and fireworks scare away demons and evil ghosts. 2018 is also the Chinese year of the Dog which symbolises luck.

The Northern region of the state has been slightly rewarded with a cooler change spreading from the Liverpool Plains north up to the Darling Downs in Queensland. Widespread showers and solid rain have given a potential new lease of life for majority of the summer crops that have been under immense pressure the last few months. With forecasts hinting at thirty degrees and below, rain is also said to accompany the cooler days with the weekend set to see between 10-30mm throughout the North West and Southern Downs. On a global scale Australia seems to be the only ones getting a hint of respite. Russia and Europe are set for more devastating weather as crops come out of their dormant period heading in to spring. The same can be said about the South American weather with prices being etched higher due to no sight of a needed change anytime soon.

Sorghum has settled itself this week when looking at the strength it showed over the past fortnight. With the Aussie dollar moving freely between the $0.77-80 mark as of late, this does give the buyers some wriggle room when chasing tonnages. International demand is sourced all over for differing end products where our domestic use is drawn to the piggery, poultry and aquaculture feedlots. With the two markets competing for this seasons Sorghum it should allow growers to play a much larger role in their marketing. With the current dumping dispute between China and the US, this could continue to work in our favour market wise, watch this space in coming weeks! Faba beans continue to be in demand as the dry weather forces a greater need for stock feed throughout the North West and Southern Downs. Ex-Farm prices still sit on the $280 level for now depending on location.

Market Prices

Sorghum 1

Sorghum 2

Chickpea #1

Del Brisbane

$315 M/A

$290 M/A

$640 February

Del Downs

$297 F/M/A

$280 M/A

$620 February

Del Narrabri

$280 February

$265 February

$610 February

Del Newcastle

$310 A/M

$610 February

Chickpeas have been a bit softer this week due to decreasing demand seen out of Asia. The crucial time is closing in as the Indians get in to the thick of their harvest, this give us a detailed look in to the quality and quantity across their crop as well as if they can cover their total demand. With Ramadan (Month of fasting) a lot sooner this year in May, from March through to June will be quite volatile and active depending on the required tonnes sought after from Pakistan and Bangladesh more specifically. For now buyers are taking parcels on a day by day basis with interest coming and going throughout the day depending on market shorts.

Cotton had a comfortable gain earlier in the week with prices jumping up twenty dollars just overnight. This rally was off the back of some uncertainty on supply as well as the growing demand seen across the world. Australian Cotton continues to struggle through the end of what has been a gruelling summer, though with some more rain expected and friendlier temperatures growers may be able to see the light at the end of the tunnel (a wetter autumn). Bale prices today are at $550 for 2018, $530 2019 and $515 for 2020. The AUD finished with a slight gain yesterday and today sits at just over the $0.785 mark.

AgVantage Commodities Market Report 15/2/2018

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Fact of the Day –Norway, a country of 5.2 million people and about 75,000 reindeer, has won 329 Winter Olympics medals, with the U.S. in second, with 282. The amazing thing has been Norway’s dominance in cross-country skiing, which accounts for 107 of its medals. The U.S. has just one in cross-country skiing.

As the mercury continues to soar in to the high thirties throughout the week, scattered storms are inflicting more bad then good, causing blackouts and the odd stubble fire across the North West. Every few days forecasters push their projections of rain back further and further which is appearing to be more of a mirage for growers than anything else for now. This week the eastern states vary quite incredibly in conditions, we have forty five degrees in North Queensland and snow falling in Tasmania. This distance is about as the same as travelling across Europe from Norway to Egypt and just showing how Australia’s climate is spread over such a diverse three climates (Tropics, Sub Tropics, Temperate Zone). Futures prices have also been influenced in the US via the prospect of rain to hit the plains which is in dire need just as much as here at home.

We said it before and we will say it again, Sorghum! This week has been quite interesting to go along with a very active month. Australian Sorghum is firstly now more competitive due to the tiff between the US and China, and secondly the dryness across the dominant growing areas has caused a below average yielding crop with the crop bureau projecting a decrease in tonnes creating a strong market rally. Faba beans continue to be in demand as the dry weather forces a greater need for stock feed throughout the North West and Southern Downs.

Market Prices

Sorghum 1

Sorghum 2

Chickpea #1

Del Brisbane

$315 M/A

$295 M/A

$640 February

Del Downs

$300 F/M/A

$280 M/A

$650 February

Del Narrabri

$280 February

$262 February

$630 February

Del Newcastle

$310 A/M

$630 February

With last week’s increase on the tariff in India not playing really any role in the market price, the figures have been heavily influenced by the other counter party’s looking to own some prompt tonnes. Bangladesh and Pakistan have been in and out of the market quite significantly over the past 4-6 weeks and this has been shown through the constant fluctuation of Chickpea values. As they are not huge players within the market, with India not buying they still have a certain degree of impact with the ability to move our prices by $40-50. Towards the end of this week these two buyers have slowed down their intake as they expect our market to soften whilst India’s harvest continues to look optimal so far. This then creates a lower chickpea price in which they would be expected to renter the market and purchase Australian tonnes at the lower level.

Cotton has held fairly steady over the last week with the main focus being the acreage in America as well as the deteriorating crop conditions. We are told to expect some rain in NNSW and SQ in the next week though seems unlikely this far out, we can still be hopeful nonetheless. Bale prices today are at $540 for 2018, $532 2019 and $510 for 2020. The AUD finished with a slight gain yesterday and today sits at just over the $0.787 mark.

AgVantage Commodities Market Report 8/2/2018

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Fact of the Day – Super Bowl LII – On Monday the 1,151 combined yards by the two teams was the most in any NFL game ever. The 74 combined points are the second-most ever in a Super Bowl. Tom Brady set a new Super Bowl record with 505 passing yards, breaking the record he set in last year’s final win over the Atlanta Falcons (466).

Towards the end of last week, the North Western parts of NSW received scattered rain with some growers experiencing up to 30mm in only a short space of time. Although other parts received less, it was still a positive change to replenish top soil moisture and give summer crops a well needed drink as they approach their respective development stages. Rainfall throughout January was very much below average which has also affected multiple layers of soil across the region. Looking over the next five to seven days, temperatures are expected to rise again reaching the high thirties and continuing on to this time next week. Heading across the Pacific, the Americas are facing some degree of weather troubles with Argentina receiving some rain but nowhere near enough, whereas the US plains are still lacking any falls. This in return has supported grain and oil values on the Chicago Board of Trade (CBOT) and Intercontinental Exchange (ICE).

Sorghum is now the word of the month as growers from the Darling Downs South to Narrabri are getting in to their paddocks or edging closer. For now there isn’t an abundance of grower engagement as most are waiting to check quality and quantity before moving in to the marketing of the grain. With the hot conditions forecasted to continue over the next week we don’t expect values to alter too much from where they have been in recent days. Factors such as the weakening Aussie dollar and China and US dumping allegations should force our market to be that little more competitive. Prices delivered are Brisbane $315, Darling Downs $300, Narrabri $270, Tamworth $290 and Newcastle $305. Barley and feed Wheat demand has rallied also this week with F1 and SFW1 reaching $335/mt delivered Downs, $315 Texas and $295 in to the Liverpool Plains (At time of writing). Faba beans as usual haven’t had too much movement and are priced at $270 ex-farm depending location and subject to enquiry. High quality beans are also indicative at $290 in to Goondiwindi and Narrabri.

Chickpeas continue to wreak havoc for growers and buyers as the volatility of the market remains with prices fluctuating back and forth every day. Demand out of Pakistan comes and goes in very short stints, this makes marketing not as simple, especially with a floating AUD.  On Wednesday morning India increased the Chickpea tariff by 10%, though this won’t really play too much in to the market prices as they are not buying regardless. So far this week we saw prices hit a high $685 for Brisbane delivery, $670 in to the Downs and $650 Narrabri/Wee Waa. Though in between this high and today there has been many buyers pull back from the market as well as injecting a premium to secure some tonnes in the short term. For delivery in to Brisbane today prices rallied even more at $700, Downs $665 as well as $580 for October/November delivery and $650 in to the Narrabri and/or Packers.

With the Monthly reports due to be released Friday, the market doesn’t have much to go off until the data is available, we expect the levels to remain unchanged until the publication comes out later this week. After the rain received last week gave current crops a nice boost, the conditions are set to go back to the same faced over the past two months, hot and dry. We have seen the prices come back over the last 2-3 weeks and bale prices over the next three seasons sit at $535 for 2018, $525 2019 and $510 for 2020. The AUD finished with a slight gain yesterday and today sits at just over the $0.78 mark.

AgVantage Commodities Market Report 1/2/2018

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Fact of the Day – Primarily known for his singles exploits, Roger Federer has also won eight doubles titles in his career, yet none since 2008. The biggest of those came at the 2008 Beijing Olympics winning gold with Stan Wawrinka, and the 2003 Miami Masters with Max Mirnyi.

January throughout the region has ended on a mildly positive note with growers seeing some surprising drops of rain over the last weekend. With drops between 15-35mm seen across the northern parts of state, this has cooled off many paddocks and given the soil some well-deserved respite. With scattered showers forecasted across the North West and Southern Downs over the next 5-7 days, we also have some sub thirty degree days to look forward too over the coming weekend. The US is also facing harsh conditions with some speculation in to their winter Wheat season being brought forward with declines expected by around twenty percent to where we started the year. The outlook isn’t all grim but could be the second year the American plains have faced a tough season.

With Sorghum harvest under way in parts of Queensland, there have been trickling reports that the grain is holding its own in regards to quality and specifications. The heat has taken its toll over the last month though with the early plant, growers have attributed the November rain and that it gave them the boost that was needed to prevail over the festive month’s heat wave. Heading south the later crops have had no real substantial rain during the prime development period, and this could be shown in the coming weeks when headers start rolling in to paddocks south of the boarder. Sorghum is very strong and firm in pricing for a February/March delivery, in to Brisbane and Newcastle we are looking at $300 per tonne and $285 for the Downs. Barley and feed Wheat have followed suit once again with a small rally this week in the domestic market. Both grains can are priced at $330 for March/April delivery in to southern Queensland. Faba’s remain unchanged for ex-farm values at $255-$265 depending location and subject to enquiry, with also added demand interest in beans in the system.

 

After a nice rally last week, over the long weekend we saw decreased demand from Egypt and Pakistan. These countries are large players within the market but demand can be subdued within hours where India is the real mover and shaker in this game. The volatility we expect to continue at least until the sub continents harvest is well underway in the coming weeks. This week has brought a steady declining plateau in pricing so far with $640 in to Brisbane port, $630 delivered Downs and $600 in to Narrabri packers.

 

The Cotton futures market has made incremental losses over the last week, this can mainly be seen due to buyers exiting the market from the highs seen over the past month. Prices should have more of a guide after next week’s USDA report comes out and evaluates the world supply thus far. Prices are also reflected in this negative market change with 2018 bales at $522, 2019 at $510 and 2020 at $500. Forecasted weather is also not as positive moving in to February for NSW growers and plants, though QLD Cotton is set to have at least at 30-55mm drop over the next few days, all of which are crucial. As the AUD still remains above the eighty cent mark it is also playing its own part in this thirty dollar bale price drop. The dollar opened today at $0.807.

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