AgVantage Commodities Market Report 30/08/2018

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Fact of the Day – During the US Prohibition in the 1920’s, moonshiners would wear “cow shoes.” The fancy footwear left hoof prints instead of footprints, helping distillers and smugglers evade police when going from county to county.

No one was confident in the forecasted rain over the weekend, but for some, there was a considerable drop depending on location in NNSW. Narrabri and Wee Waa saw between 20-30mm Saturday night, the plains copped 10-20mm and at the top of the list, Boomi/Garah area saw 40-65mm. Now what does this do for the region from here on out? For anyone to see considerable change, there has to be continued follow up rain to reinforce the only recently moist soils and get some healthy germination. Markets softened heading in to the weekend, but if we face a dry start to spring, prices will soon climb back to their recent highs. Last week the AUD plunged to as low as 0.7245 on the back of leadership uncertainty in the government. Today the Aussie dollar sits at $0.735.

With the rain only reaching as far south as the Central West, the south has now only experienced negative four temperatures and an abundance of frost. As demand for feed grains is still needing to be sourced from across the country, the port logistics is where majority is now being purchased from straight on the truck. Pulses remain quite steady in to the Narrabri and Downs market zones and have fallen from the height of $830 not long ago. Though at $800 delivered, it still is a reassuring sign since the last year has been quite brutal on sellers with highs and lows for chickpeas fluctuating.

Cotton has had an up and down week, though today saw some modest gains. Rain through the states as well as here in Australia has given a small amount of hope that if we see more moisture through spring, the season may not as be as seriously affected as first thought, only time will tell. 2018 interest is decreasing as ginning heads in to September, though for the seasons ahead, merchants are still eager. Bales today stand at$608 for 2018, $630 2019, $585 2020 and $525/bale for 2021 and 2022 (at time of writing).

AgVantage Commodities Market Report 23/08/2018

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Fact of the Day – The world’s oceans contain enough water to fill a cube with edges over 1000 kilometres in length. The largest ocean on Earth is the Pacific Ocean, it covers around 30% of the Earth’s surface.

Looking abroad, the CBOT took a hit due to Russia advertising their want to increase exports between now and the end of the year, even though there is a chance of declining seasonal output. Across the water, the US is on the downhill run of their spring wheat harvest, with progression at a recent high against previous seasons. With spring only around the corner here at home, supposed rain this weekend is looking to be winters last hope for any kind of respite from relentless cold and dry conditions. The Narrabri/Moree area is forecasted to receive up to 50mm, with further east in the New England set for 10-15mm. For months predictions have rubbed us all up the wrong way due to falls not coming close to what was expected, and this next event seems to be no different. The general consensus of meteorology at the moment is “can only wait to see what’s in the gauge this time around again”.

The simple way to put it is, conditions haven’t changed and prices are still surging onwards and upwards. As touched on in the last few months, not one size fits all in this current market. There is grain being shipped from all over with about four vessels a month pulling in to the one port across the east coast. Feed grain throughout Narrabri and the LPP has been purchased ex-farm at the $485-90 level with delivered markets above $500 subject to location. The border area is being supplied by the Brisbane market zone which is still trickling out through the Downs and MacIntyre Valley. Moving south of the border, it gets harder to compete with pricing as freight and logistics start to take their toll, therefore opting for higher delivered prices further south. Chickpeas took a small hit, though nothing to be concerned about as they are still fetching the $800 mark in to Narrabri and the Downs, with new crop sought after at $850 for October/November. Other cheaper alternatives are being looked at instead of the pricey Fabas which today stand at $650 ex-farm. Even though Cottonseed is on the same level ex-gin, oats, corn and lupins are becoming a more prevalent choice for now.

Cotton futures have had an interesting week, we saw selling take its toll on the market, though recent days have seen cumulative gains bringing bale prices back to preferred levels(above $600). Dry weather also across the growing regions in the US have favoured the market due to preferred picking conditions. There still is a high demand of buying interest from the merchant side, though with current climatic conditions, price isn’t relevant when there is no water to work with. Still making its return to healthy pricing, bales stand at $600 for 2018, $625 2019, $585 2020 and $530/bale for 2021 and 2022 (at time of writing).

AgVantage Commodities Market Report 16/08/2018

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Fact of the Day – Tiger Woods became the world’s first billion-dollar athlete in 2009. Even though no longer considered the best playing, he is still the highest-paid. Tiger is also famous for wearing red on the final day of tournaments. This meant that red was the colour Tiger almost inevitably had on when he won, he did this as his mother said it was his power colour when he first started.

The last ten days have seen feed prices across the board sky rocket. We have watched prices etch higher over the past twelve months, though the last month is really where the market has gone berserk. With boats being unloaded in to Newcastle and Brisbane, we see grain travelling to all market zones across the states just to cover buying needs for the next few months at least. Cold temperatures look to continue for the remainder of the month with central NSW receiving Snow which isn’t doing any wonders for already disastrous conditions. Wheat overseas is looking positive in the US, with spring wheat quality looking favourable at this point in time. Corn has made a healthy gain through Eastern Europe, though across Brazil it seems to have had some losses on the market regarding their production outlook. The Aussie dollar has been quite subdued over the last week as concerns in the gateway to Europe (Turkey) still continue, it holds around the $0.723 mark.

Compare the Pair

August 1st 2017

August 1st 2018

Faba Beans (Feed)

$255 XF Moree

$620 XF Moree

Feed Wheat (SFW1)

$300 XF Narrabri

$485 XF Narrabri

Barley (F1)

$280 XF Narrabri

$495 XF Narrabri

Chickpeas #1

$780 Del Narrabri

$815 Del Narrabri

Currently for feed demand and drought relief, grain and hay is being shipped from the other side of the country and interstate, including Tasmania. Hay, Barley, Wheat and everything in between is heading to every corner of eastern Australia to alleviate the lack of supply that is only wearing more and more thin. Prices have had more than a substantial jump as of late with Wheat ex-farm north of Narrabri very close to $500/mt. The sellers’ market stays very firm as buyers can’t quite put a bid down, as within a day or two, prices have shifted $10-20 north. Pulses have been a nice turning point at above $815/mt, considering the conditions being faced aren’t positive at all. Growers that have held on are pleased to be back where we were over a year ago at a sellable level. New crop is bid at $850 delivered Narrabri, Wee Waa and the Darling Downs.

Last week was spent by myself, and over two thousand delegates on the Gold Coast for the 2018 Australian Cotton Conference. Sustainability and innovation were the main talking points, as well as where we go as an industry from here in to the next generation. From block chain analysis to robotic weed management and everything in between, there was a lot to take out of the biannual three day event. This week though the market has taken quite the hit with bale prices dropping by around $25-30. Today’s prices stand at $616 for 2018, $632 2019, $585 2020 and $530/bale for 2021 and 2022(at time of writing).

AgVantage Commodities Market Report 2/08/2018

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Fact of the Day – No matter what month a horse is born, its birthday falls on January 1st and this is the universal birthday, whereas it is celebrated on August 1st in the Southern Hemisphere. This was used to make it easier to keep track of racing horses’ bloodlines but now is generically used for all horses in today’s day and age.

We kick off August with a few puddles still on the side of the road here in Narrabri from the weekend’s rain, but it was a select few who were lucky to see any of it. All that eventuated from the passing over weather was a nice change of scenery and a top up of local bird baths. Obviously stock feed is where the demand is and since last week prices have not slowed down buyers are rushing to secure more before the next jump. Fabas, Wheat, Corn, Oats, Barley, Sorghum and Cottonseed inventories are all diminishing at a rapid rate, causing sellers to tighten up on out loading and safeguarding for the months ahead. Demand on to the Downs has also increased over the last week, though supply is still available from the vessels that are delivering stock from the south. Boats will continue to come from the south and Western Australia causing port prices on the east coast to rise to keep the grain away from sticky overseas buyers. On the trade side, the CBOT has climbed healthily due to the reports of season on season decline in output throughout Europe and further eastern countries across the Black Sea. The Grains industry conference is currently on in Melbourne, so it will be interesting to see the feedback and forecasts that emerge from the industry leaders on a national and international scale.

Compare the Pair

August 1st 2017

August 1st 2018

Faba Beans (Feed)

$255 XF Narrabri

$600 XF Narrabri

Feed Wheat (SFW1)

$300 XF Narrabri

$415 XF Narrabri

Barley (F1)

$280 XF Narrabri

$425 XF Narrabri

Chickpeas #1

$780 Del Narrabri

$700 Del Narrabri

Cotton Bales (2019)

$480 Lower Namoi

$660 Lower Namoi

Around New South Wales there is feed being sourced from every corner of the state. Feed Wheat starts at $415 ex-farm Narrabri and a little less on to the plains with buying levels increasing the closer we move north at $420 out of Goondiwindi. Sorghum has traded delivered Tamworth and Darling Downs at $390. Barley continues to hold its own level with it priced at $430 XF north of Moree with it also being a rarity to come by at all with on farm inventory all but gone. Chickpeas have had a positive change with overseas demand picking up as they wake up to the fact that there will be next to no tonnes this season compared to previous years. Chiccies at Wee Waa Namoi were bid at $700 this week with delivery for August. New crop prices no matter how appealing don’t look to get any traction soon considering current conditions, prices are running parity with old crop due to low selling and buying demand. Faba beans can’t stop and won’t stop it seems, demand is thriving for graziers and the level hit $600 ex-farm last week with more of a climb set for this week.

Cotton bale prices had a positive week etching up a few dollars day by day. General weather forecasts and conditions both in the US and here at home seem to be the main driver. Those that do have the water available are showing great interest in the next two seasons, but for most, this is all on the back burner until we get some moisture from the big man upstairs.Today’s prices, $645 for 2018, $657 2019, $610 2020 and $530/bale for 2021 and 2022(at time of writing).

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