AgVantage Commodities Market Report 29/11/2018

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Fact of the Day – Stephanie Gilmore has won her seventh world surfing title after finishing on top of the season ending Pro event yesterday in Maui, Hawaii. This win has tied her with fellow Australian Layne Beachley for most women’s world titles. Gilmore downplayed if Kelly Slater’s record of 11 titles was next on her agenda.

Scattered showers have draped across the North West and plains, with the amount intensifying the further south and closer to Sydney you go. The Liverpool Plains and hunter have received about 10-15mm, with Sydney copping a horrific downfall of over 110mm in the past 24 hours. The northern border regions, although still aching for more, are happy with the recent falls as they gave summer crops and grazing country a well needed drink. The mercury is set to be knocking on 40’s door this weekend which should quickly dry up the water still lying on the sides of the road. Lack of rain received in the Darling Downs has forged a strong rally for new crop sorghum, with market prices jumping $10-15/mt since the start of the week. As we now have Sorghum crops across all stages, we will also see further plantings across the region with harvest/delivery periods stretching from late January out to May of next year. Wheat and barley markets are steady as there is still significant supply around the area when considering the season and year we have had.

As I have been building up to the last fortnight, the G20 summit is looking to be set for a showdown for a large amount of the countries attending. We have the Chinese and US trade war that is only becoming more tense prior to the required talks between the two heads of state. Australia also has their own quarrel to discuss with the Chinese on the barley anti-dumping probe that was brought forward last week. Then, the most heated topic of recent days is the military action evolving between Russia and the Ukraine around Crimea, this I figure will be addressed between President Trump and Putin, with Trump speaking on behalf of President Poroshenko. With Ukraine looking to enforce martial law in retaliation to the Russian navy firing upon and seizing Ukrainian war ships on Saturday, this will play a role in how the export market reacts to the closure of required shipping lanes. Once again, watch this space….

Chickpeas have been quite dormant the past week, though still haven’t taken a backwards step from their recent highs. Quality seems to be the only problem besides the dwindling yield, with defects and splits creating most of the hassle for growers, forcing them to incorporate grading fees and discounts for more leeway on specifications. With both old and new crop still being sought after, selling demand is still very minimal due to prices just not satisfying grower targets for now.

Indicative Pricing

CHKP 17/18

CHKP 18/19

Brisbane FIS

$810/mt

$905/mt (Jan/Feb)

Downs Oakey

$790/mt

$890/mt

Goondiwindi

$800/mt

$865/mt

Narrabri

$770/mt

$870/mt

Wee Waa

$765/mt

$855/mt

Monday we saw cotton futures rally, though that was quickly pulled from underneath us with Tuesdays losses. For now the market is quite static with low investor interest, as well as uncertainty on global production and this weekend’s possible summit outcomes. We don’t expect anything too exciting this week price wise, though next week could be make or break depending on any newfound Chinese and US relations, let’s hope for a Christmas miracle. Prices today for seasons ahead now stand at 2019 $6042020 $590 and $536/bale for 2021 and 2022 (at time of writing).

AgVantage Commodities Market Report 22/11/2018

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Fact of the Day – Each year, the president of the U.S pardons a turkey and spares it from being eaten for Thanksgiving dinner. The first turkey pardon ceremony started with President Truman in 1947. President Obama pardoned a 45-pound turkey named Courage, who was flown to Disneyland and served as Grand Marshal of the park’s Thanksgiving Day parade!

Mid-week rain swooped across the Upper Hunter, Liverpool Plains and the North West, with falls varying but no figures to report currently as it continues to pour whilst writing. The early weeks of November weren’t as harsh as weeks prior, though they were warm enough to add to already struggling summer crops. If this rain continues, even at intervals, we should expect an increased plant heading in to the New Year to take advantage of improved soil moisture, plus improved crop conditions. With rain being a positive, the negative of the week has been the allegations from the Chinese as they launch an anti-dumping probe into Australian Barley exports. This news has understandably shocked and softened the market per se, with many already jumping to conclusions that this is a retaliation to Australia siding with the US over security measures in the south pacific sea. Like most things in this day and age, politics will always have an influence, and for now it seems like that’s the case with reports saying that this has been in the works for some time. Though it could also be an instance of Australia being in the wrong which could also be more than possible, only time will tell. How this plays out for both parties will no doubt be addressed heavily at the G20 summit next week. Oil prices have slid further down and at the lowest of the year, so keep enjoying these lower fuel prices.

Touching on last week’s section on chickpeas, we are now at much higher prices around the region for both old and new crop. Even though the DCT market is a little softer, packers and buyers are still more than keen to pay a premium to get tonnes moving through the gates. This season crop seems to be having some trouble with quality in regards to some mould, off colour and high defects due to such dry peas splitting. Though there are avenues for off spec grain at discount whether it be delivered in to Narrabri, Goondiwindi or the Downs. Faba’s for new crop have dropped by twenty dollars and sitting at $760 for top grade, with last season’s beans priced at $630 ex-farm dependant on location.

Indicative Pricing

CHKP 17/18

CHKP 18/19

Brisbane FIS

$810/mt

$915/mt (Jan/Feb)

Downs Oakey

$800/mt

$900/mt

Goondiwindi

$785/mt

$880/mt

Narrabri

$790/mt

$880/mt

Wee Waa

$765/mt

$850/mt

Cotton futures have continued to drop away over the past week and have struggled to make back those losses. We don’t expect any changes for the remainder of the week with markets closed due to the Thanksgiving national holiday. We should have some more information to work with come summit time next week. Prices today for seasons ahead now stand at 2019 $603, 2020 $595 and $530/bale for 2021 and 2022 (at time of writing).

AgVantage Commodities Market Report 15/11/2018

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Fact of the Day – The Flanders poppy was one of the first plants to grow on the blood-soaked battlefields of France and Belgium. In nineteenth century English poetry, poppies often symbolised sleep or oblivion. After WWI, silk poppies were sold on Rememberance Day with proceeds going to a charity for French children and to the Returned Soldiers League (RSL).

Scattered showers and cooler days over the past week have been a more than welcome site, though there is still an abundance of moisture still needed for struggling summer crops. Even though the outlook appears grim, with current harvest coming to an end, there is still more time up growers sleeves to reap a degree of reward from the sorghum and cotton crops in months ahead. The sorghum market has softened in the last week with scattered rain and cool weather playing its part and cotton has been quite bearish too. As Guns N’ Roses put it “we can still find a way, cause nothing lasts forever, even cold November rain”, now it’s not directly applicable, but we get the gist, a hope of an ending drought and continuous rain to end the year. Across the seas, oil prices have plunged for yet another session, with prices down by $20/barrel. This is due to a number of factors, one being Trump chasing lower prices and no cuts to production in retaliation to OPEC’s reports on decreasing their output of barrels per day. This also does impact the corn market in regards to their ethanol. Trump, supply, a murdered Saudi journalist and OPEC are all what will influences the market, but more importantly, our fuel prices here at home, so fill up today!

Marketing your pulses is definitely worth the thought as we are closing in on the end of the 2018 year and season. In regards to old crop, the market buyers (Pakistan, Bangladesh and Middle East) are still chasing tonnes for export, and this has been shown through the $120/mt increase in price over the past ten days. Narrabri delivery is bid at $770/mt with the Downs bid more competitively at $780/mt. The old/new crop spread has now shifted, minimising the gap by $100/mt and stands between $20-$30/mt, dependant on location. New crop is priced at $820 Narrabri and $835 Oakey. To put it bluntly, the season has been quite disappointing, though if history is on our side, we should expect to see demand pick up further as we move in to first few months of 2019. Faba beans continue to fair strongly, with bids of 18/19 season top grade beans at $780 delivered Narrabri, old crop remains floating at the $630 ex-farm level for now.

Cotton futures have had a consecutive loss over the past three days, this is purely put down to small weather concerns and lack of investor selling. For now, across prime growing areas, irrigating and planting is still in full swing, and doesn’t look to be slowing down with more disappointing forecasts. Though, as I stated last week, the market will look for guidance in the coming weeks from the G20 summit. Hopefully some constructive negotiations between China and the US are signed off on to put this trade war to bed. Prices today for seasons ahead now stand at 2019 $605, 2020 $600 and $530/bale for 2021 and 2022 (at time of writing).

AgVantage Commodities Market Report 8/11/2018

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Fact of the Day – Cross Counter’s thrilling Melbourne Cup win finally put an end to 26 years of heartbreak for Sheikh Mohammed’s famous Godolphin stables. His Highness Sheikh Mohammed bin Rashid al Maktoum is the prime minister and vice-president of the United Arab Emirates and the Emir, or ruler, of Dubai and now a Melbourne Cup winner.

International markets are being watched closely this week, with more than enough happening his month and next to impact our grain prices here at home. Firstly, the WASDE report is due out Thursday evening which will shed some needed light on how current estimates are placed on a domestic and global scale. Secondly, the G20 summit in Argentina is set for later in the month, although many crucial matters will be touched on, the main focus for most will be Chinese and US trade negotiations. A recent phone call between the two leaders had a positive outcome, with both heads of state confident that there would be a mutually beneficial trade settlement agreed upon. Cotton and Sorghum markets will have most at stake during this summit. Finally, the mid-term US election, it has been two years since Trump was voted in and election results are still trickling through. Though the Democrats are still looking to hold their seat swing, whereas the Republicans are tipped to hold on to the senate once again. The remainder of the year is looking to be quite exciting in terms of global markets and international trade.

Northern NSW and Southern Queensland crops copped an atrocious start to the week, with 40 plus temperatures and some wicked winds to add salt to the wound. For the planted summer crops, there is a dire need for follow up rain, just to balance the harsh conditions faced, as well as what the remainder of the year brings also heat wise. Scattered showers are forecasted for NNSW and the plains, though yet to hear of any substantial falls just yet. Sorghum has had a positive rise this week, it is a good time to look at locking in a guaranteed minimum price (GMP) to provide a secure price and also to have the option of riding the market rally’s this season. General harvest reports continue to file through with most wheat holding protein levels, though screenings appearing to be a problem for some. So far wheat quality has ranged from APH1 down to HPS1 (high protein screenings). There is also still looking to be a healthy amount of straw cut for bales (Wheat, Barley) which is looking for homes in to lot feeders and graziers around the area. Majority of growers around the region look to be finished by the end of the month or earlier.

Chickpeas have had a well-deserved spike this week, this rally created buying interest for Pakistan, Bangladesh and parts of the Middle East. It is a good start, though we mustn’t be quick to forget the large stockpile of chana that the Indians are sitting on. New crop Downs and Narrabri prices were back up to the $800 level, warehousing sites such as Goondiwindi, Wee Waa, Trangie, Belahna and Bengalala all sat up at $770/mt delivered site. Today there old crop demand has also surprisingly been heightened, this throws out some of the buyer’s colour and weight issues that we have been hearing over the last month. Last season’s chiccies are looking at about $100/mt less than current crop, though definitely worth a thought due to previous market prices over the past year.

Cotton has not shared the same amount of movement compared to grains this week. The market has been snoozy you could say, purely floating in a state of limbo as futures have their rises and falls, seemingly cancelling one another out. For now there isn’t a huge amount of selling interest, due to harsh growing conditions across the North West and very minimal follow up rain. Prices today for seasons ahead now stand at 2019 $615, 2020 $600 and $540/bale for 2021 and 2022 (at time of writing).

AgVantage Commodities Market Report 1/11/2018

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Fact of the Day – After Monday’s World Series victory for the Red Sox, Boston is now the undisputed title town of the 21st century. Since 2001 the city of Boston has won 5 NFL Super Bowls (Patriots), 4 MLB World Series (Red Sox), 1 NBA Championship (Celtics) and a NHL Stanley Cup (Bruins).

November is now upon us and so is the 2018/19 harvest period. Reports from CQ all the way down to the North West show there has been positive news on yields and quality, though we all know with the good comes some bad. Most cereals are underway around the region, give or take a few areas that are just not fully developed. Temperatures are set to hit the big 40 this weekend to kick off the last month of spring. This heat will definitely take its toll on both unharvested grain, as well as summer crops already in the ground, such as dry land cotton and early Sorghum. On a global market scale, President Trump is threatening more heightened tariffs to escalate the already damaging trade war between the two super powers. They expect to increase these tariffs by 10-25% come January. This tiff should be monitored closely, as it could really impact our sorghum market if China look to us to supply once again. The European season is also facing harsh conditions much like the Australian season, though France looks to have a stronghold on the market by supporting current wheat values.

Quality wise, wheat now being stripped is fairing reasonably well with Intel from growers and over the weighbridge stating there is no trouble with high protein and test weights so far this season. Though in saying that, we will learn much more day by day as more and more grain is stripped throughout the border regions heading south to the plains. Prime hard wheat is bid in to Narrabri at $470/mt, with also the option of multi grade contracts to include decreased/heightened protein and/or screenings. Demand for barley is still very much subdued since we reached those high prices in August. There was increased demand and low supply but since then, it has shifted completely. Recent trades show new crop F1 bid indicatively at $430 ex-farm Narrabri and surrounding areas.

Fabas have had a very appealing few days, last week we spoke on #1 beans in to Narrabri, since then they have now jumped fifty dollars to $800/mt for November delivery. This is mainly due to such a supply of poor quality feed grade Fabas over the last year. On top of this you have two very small seasons in a row for the pulse which also pushes those prices onwards and upwards. #2s and #3s are at a $20/$40 discount also, that’s over $500/mt above where we stood a year ago. Where we touched on Chickpeas last week, the overseas demand is still pretty well not evident, though we expect the market to rally in to the New Year as Bangladesh will have to purchase tones regardless to fill their own demand. Prices today stand at $780 for new crop delivered in to the Downs and Narrabri, with warehousing and multi grades (CHKPM) also of great interest to growers. Old crop peas hold their own at $680 delivered Wee Waa, Trangie and Goondiwindi.

Working off last week’s ups and downs of the cotton market, this week has been fairly lacklustre to say the least, with trading movements very low for now. Weather in the US is now much of a lesser concern, along with crop progress here at home with some decent falls lately to kick along soil profiles. Prices today for seasons ahead now stand at 2019 $616, 2020 $595 and $535/bale for 2021 and 2022 (at time of writing).

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