AgVantage Commodities Market Report 31/5/2018

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Fact of the Day – With Game one next week, for the first time in State of Origin, both teams will be captained by players born in New South Wales. Greg Inglis (Kempsey) and Boyd Cordner (Taree) both towns only 120km apart on the Mid North Coast of NSW.

Some cloud, a couple gusts of wind and a sprinkle barely wet enough to dampen a newspaper is all we have seen as we hit the end of May and the start of winter. Groundhog Day continues weather and market wise, a slightly tempting forecast to go along side increased buying demand with not much supply. The markets were fairly still to start the week due to the public holidays across the UK and as well Americas Memorial day. Though with recent news of the US placing tariffs on imports from China, this had a stale effect on the CBOT Wheat, Corn and soy bean markets. Currencies across the globe are quite sporadic with the euro being influenced by political concern and the same being said about the US for their constant back and forward joust with the “Supreme Leader”.

The current domestic demand is still more than rampant due to the obvious reasons faced over the year so far. Pricing still remains firm in to the usual delivered market zones across southern Queensland and NNSW, with delivered farm markets also increasing as graziers look to cover themselves heading in to a tough winter. Feed grains (Wheat, Barley) in to the Darling Downs still hold their worth, today bid at $400/$410mt. As for Sorghum, from what we touched on last week, pricing has continued to drop from the US/China talks which impacted our export demand program dropping the market roughly by $25-30/mt. For sorghum to be pursued more competitively, feed grains will need to continue their strength (which isn’t unlikely based on current conditions) so lot feeders will be able to justify the cost to increase the grain in to their feed rations.

On the pulse side of the market and talking chickpeas, prices for both old and new crop have jumped this week as we head in to potential planting, partnered with production uncertainty. Pakistan has shown interest and this is where we see the increase as India are still not showing the slightest of interest our way. On a delivered basis in to the Downs, prices are at the $650 level for prompt delivery less $50 for out of spec grain (CHKPM). In to Narrabri, current peas are looking at $620 with new crop delivered October standing at $650/mt with the Downs at $635 Sept/Oct. Interest across warehousing sites still is strong from Goondiwindi down to Trangie and Gunnedah. Faba’s still sought ex-farm at the $450 level with firm offers taking the reins heading in to the July/August/September period. 

As picking is almost done for another season, the cotton market is not showing any signs of slowing down for now. The futures have been rallying quite substantially day by day with all contracts for 2018 above the 90 cent mark. From current reports in the states, Texas’ growing area will continue to cop high temperatures for the next two weeks at least. This seeming to be the main driver of the current market trend. How this will impact the crop production is placing a large sense of fear across most US growers. Here at home, current crop and the next four seasons bale prices have been etching ever so high though the main focus is shining on to 2019 and 2020. Prices for 2018 are now standing at $620, 2019 $640, 2020 $580, 2021 $535 and 2022 at $535/bale (at time of writing).

AgVantage Commodities Market Report 24/5/2018

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Fact of the Day – Volcanoes, also known as mantle plumes are hotspots and found at a number of locations around the globe with the most notable being in Hawaii.The biggest known volcano in our solar system is on Mars and it measures a sizeable 600km wide and 21km high.

Planting across the region continues for very few growers with barley, chickpeas and wheat being just some of the winter crops going in with a side of hope. Moisture for some is still promising around the border area but for the majority, the window of opportunity is getting smaller by the week as forecasts continue to disappoint the whole eastern side of Australia. Europe looks to experience inconsistent showers with above average temperatures with the America’s facing much of the same with no real punch behind it. The Aussie dollar has been shifting following the current dryness across both hemispheres but still holds more strength on the greenback than it did last week, up a whole cent at $0.757.

Most grains have continued their bullish form over the past four to six weeks with the domestic demand so rampant due to the grim weather outlook past, present and future. Wheat in to Brisbane is stirring the $410/mt mark with the Darling Downs just trailing behind by ten dollars at $400/mt. Barley has held its own and sits comfortably on the $400 mark in to the Downs as well. Sorghum had a sharp fall on Friday with news that the US and China had eased back on the trade war and more specifically the supposed Sorghum dumping. With the market now much more open, the main driver for Australian Sorghum was the demand coming from China. Due to the recent agreement, track prices dropped by a rough amount of $10-15/mt, as well on delivered markets across the North West and Southern Downs.

Pulses are at opposite ends of the spectrum at the moment, Chickpeas continue their lull as Faba’s continue to jump up in price week by week. Chiccies do not really have any buying and/or selling interest at the moment, obviously with the fasting period and pilgrimage taking its effect on the market, even in the lead up we saw only brief interest from abroad. Pricing is still at the $600/mt mark for all old crop in Narrabri, Wee Waa, Trangie and Goondiwindi with $615 the high in to the Downs for June delivery. Though continued interest for new crop builds as the season uncertainty also climbs heading in to planting. On Faba beans, the sellers’ market still reigns as demand escalates even more so from traders, graziers and lot feeders, ex-farm pricing on recent trades stands between $450-60, May 2017 trades were just scraping $200 XF.

As the season is more than halfway through, there are still bales remaining for marketing and the interest is only becoming heightened. The markets much like the grain have been bullish over the past two weeks with both this season and next above $600/bale. Although the futures and exchange rate are teetering back and forth this still hasn’t slowed the demand for the years ahead. Prices for 2018 are now standing at $600, 2019 $600, 2020 $550, 2021 $530 and 2022 at $530/bale (at time of writing).

AgVantage Commodities Market Report 17/5/2018

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Fact of the Day – With the 2018 Soccer World Cup looming next month, it should be known that over 3.2 billion people (almost half of the world’s population) tuned in to watch the 2014 World Cup. The World Cup has been played 20 times, Brazil holds the most titles with five, Italy and Germany are close behind with four each.

Winter is upon us with the days barely reaching the mid-twenties and lows getting down to minimums of zero around the region. With seed going in with or without moisture for now, what the next 4 weeks bring weather wise is anyone’s guess. This year’s winter crop is in dire straits for majority of growers, with a handful having just enough moisture to be a little more optimistic during planting over the past and coming weeks. On the international side, general dryness across Europe and the Americas continues which is taking its toll on the world markets. The Aussie dollar has been fluctuating following the dry trend across the globe and is level with last week at $0.746.

Market Prices

SOR1April 10th

SOR1 May 16th

SFW1 April 10th

SFW1 May 16th

Del Brisbane

$350 A/M

$395 J/J

(H2) $350 A/M

(H2) $407 M/J

Del Downs

$335 A/M

$382 M/J

$345 A/M

$395 J/J

Del Narrabri

$315 A/M

$360 M/J

$315 XF A/M

$360 XF M/J

Del Newcastle

$340 A/M

$375 M/J

In the table shown, the amendments we have made on last week’s prices are all higher across the board, which is just ticking over at a $1-3 increase a day. Buyers are finding it difficult to put bids out as it is purely a sellers’ market now with the dry conditions throughout the state. There are tonnes to be bought and as growers have every right to be proud owners of their grain, firm offers is where the business will be done during this continued market rally, especially with public bids gaining $7-10 a week.

Chickpeas still continue their level form and now Ramadan has begun we expect no major changes in pricing until the religious fasting period concludes next month. The buyers still have demand though at no real premiums like seen in the feed grain market. $610/mt in to the downs and $600 delivered in to Narrabri, though the new crop pricing is stronger at the same level of $600/mt in to the Darling Downs market zone for delivery in September and October. Also increased interest looms over the in-store market for warehousing in to the 2018/19 season. Faba beans are obviously in high demand for lot feeders, graziers and general traders. Prices ex-farm around the North West have spiked to $430/mt as of last trade this week (at time of writing). As stated before, it is a sellers’ market and the demand is so strong that most growers target prices are met immediately. This is up $230/mt on ex-farm prices this time last year.

Picking and ginning is in full swing with most growers pleased with what has come of thus far considering the brutal summer faced by the plants. Prices are altering over the recent days purely following the recent WASDE report on global cotton supply and the current futures. Prices for 2018 are now standing at $588, 2019$590, 2020 $535, 2021 $530 and 2022 at $530/bale. Main interest is focused on the next season with high demand from merchants and overseas market.

AgVantage Commodities Market Report 10/5/2018

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Fact of the Day – On this day in 1960, atomic submarine USS Triton completed the first submerged circumnavigation of the globe. Covering 26,723 nautical miles (49,491 km) over 60 days and 21 hours. The route began and ended at the St. Peter and Paul Rocks in the middle of the Atlantic Ocean near the Equator.

Over the past year our comments have predominantly been concerning the poor weather conditions across NNSW and SQ, and for now nothing seems to have changed by too much. We are now three weeks away from winter and the temperatures are definitely indicating that the never ending gruelling summer faced is well gone. The forecast could not look bleaker for most across the North West and southern downs heading in to the traditional planting period for the 2018/19 season. It is not just the southern hemisphere struggling on a climatic scale though, the US has concerns about the lack of rain which is bringing the question forward of whether to veer from spring wheat to differing crops. Russia even though is not doing as well moisture wise, can still rest on their laurels a little longer on the back of their bumper season last year. The Aussie dollar starts today a little over $0.743, almost a three cent drop in the past 2 weeks. 

Market Prices

SOR1April 10th

SOR1 May 10th

SFW1 April 10th

SFW1 May 10th

Del Brisbane

$350 A/M

$386 J/J

(H2) $350 A/M

(H2) $400 M/J

Del Downs

$335 A/M

$365 M/J

$345 A/M

$385 J/J

Del Narrabri

$315 A/M

$350 M/J

$315 XF A/M

$350 XF M/J

Del Newcastle

$340 A/M

$370 M/J

At the moment the best we can do is strap in and keep our arms, legs and feet inside the rollercoaster and our eyes on the current weather conditions against the markets. The forecast is the only main driver of grain markets on the domestic and export front. With graziers, lot feeders and traders all aching to secure tonnes, it is all in the hands of the sellers and what the next few weeks bring leading in to June. We have seen that in the past month, feed grain prices have rallied by an average of $30/mt across the board in their respective market zones. With a painfully dry April and now nearing two weeks in to May with no changes, a sense of panic is more than warranted in to looking at how this year’s crop will fair, if at all.

Chickpeas along with the rain are the only grain that hasn’t budged in price. With everything still moving slowly overseas, there is still no consistent demand for our peas here at home to shift their current value. This being said in an election year in India and Ramadan in the next few weeks, we expect not much news till next financial year. The buyers are still there but at the same prices as of late at $605/mt in to the downs and $590 delivered in to Narrabri, though the new crop pricing is stronger at the same mark of $590 in to the Darling Downs market zone. Faba Beans are being valued for new crop ex-farm at $340 Goondiwindi, $330 Moree and $320 Narrabri for #2s or better quality.

Cotton is now flying off across the horizon and on to the highway with ginning in full motion and classing data looking positive as the season progresses across the region. Pricing has been fluctuating but still positive especially with large interest in next seasons pick. Prices for 2018 are now standing at $595, 2019 $585, 2020 $535, 2021 $532 and 2022 at $530/bale.

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