AgVantage Commodities Market Report 21/12/2018

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Fact of the Day – During the 2010 Christmas season, the Colombian government decorated jungle trees with lights. The trees lit up when the guerrillas (terrorists) walked by and banners appeared asking them to surrender their arms. The campaign convinced 331 guerrillas to re-enter society and also won an award for strategic marketing excellence. 

Pandemonium, apocalypse like and chaotic is probably how you would best describe the last week of weather faced across most of Queensland and New South Wales. To start, central and NNSW faced a massive dust storm accompanied by winds clocked at over 100km/h which saw top soil head to NZ, though this did bring some heavy rain, with many receiving anywhere from 10mm to two inches. Throughout parts of the Darling Downs, they experienced up to 300mm (12 inches) in only a matter of hours on Sunday with FNQ copping more than double that thanks to tropical cyclone Owen. Now the scattered rain was better late than never, though how it has impacted summer crops, whether it be positive or negative will not be truly evident until we enter the New Year. This seasons also at many differing stages for most due to intervals of moisture and the increasing mercury over the past 2 months, we expect to see Sorghum coming off as early as Australia day, then from then on.

Due to such a short and dismal season, the usual supply for feed grains during harvest has dropped away considerably, though there is still plenty of demand for lot feeders and graziers looking to gain cover for January out to March. Due to recent rain, Sorghum prices have dropped away in anticipation for increased production, though Barley and Wheat are still quite strong as futures gained across the international market this week. With low east coast production, we still will look to the port prices of our Western Australian and international sellers. Protein wheat delivered NNSW is bid at $450 heading in to January with feed wheat at $435-40 and F1 $400 ex-farm depending location. With majority, if not all receival sites already running on a skeleton crew, we recommend checking with all buyers on their logistics over the festive season on whether they are open or closed over the holidays until 2019.

As commented on over the last few weeks, there is still really no immediate change in the Chickpea market. We hope to bring heightened prices and overseas demand in 2019 for the Downs/Narrabri market zones, warehoused and ex-farm old and new crop product. Stats show that in February and March we ship over 100kmt to Bangladesh, this is looking to be the same for 2019 due to poor conditions abroad. Cotton has dropped away this week on the market front, though we do not expect too much change until the US and China start behaving properly. Prices today for seasons ahead now stand at 2019 $6052020 $590 and $540/bale for 2021 and 2022 (at time of writing).

From all of us at AgVantage Commodities, we wish you a very Merry Christmas and a Happy New Year.

AgVantage Commodities Market Report 13/12/2018

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Fact of the Day – The late George H. W. Bush, was not only the 41stPresident of the United States, but also was the father of the 43rdPresident George W. Bush. He enlisted in the U.S Navy when he was 18 years old, was the youngest aviator in the U.S Navy and continued to serve in the Navy till the end of World War II, leaving in 1945 as a decorated pilot who flew 58 combat missions.

This week looks to be bring a festive change with significant rain forecasted across Northern New South Wales and Southern Queensland. Falls of 10-60mm have already fallen this afternoon around the Narrabri and Moree area. This rain although welcome, will also be a tremendous spark for the current summer crops that are in dire need of a drink, especially at this crucial development period. Sorghum prices have definitely softened up over the last 7 days, this can be really put down to anticipation of the moisture on its way, it is also a pleasing trade-off for growers as a hit in pricing is easier to swallow when crop production is increased due to late December showers. Even though the lack of moisture is more than obvious, the subdued heat has been more of a saving grace than we first anticipated, if we were to face another early summer like 2018, current crops would near be rendered useless. Weather outlooks appear to portray that our regions will escape noteworthy heat until the New Year…. Here’s hoping!

With the Christmas break approaching, majority of buyers in the pulse market, specifically Chickpeas have now closed their 2018 book for purchases as they now focus on 2019. As overseas interest is dwindling, this really doesn’t come as a surprise as January and February are traditionally the more active months for our main importers. As India are still very much doing their own thing, we must watch Pakistan’s, Bangladesh’s and the Middle East’s season and how their projected production is looking. With current reports stating their crops, to a certain degree are looking dismal, this will then create a higher demand for Australian peas, more so as these buyers look to stock up before the fasting period of Ramadan in May. Currently New Year crop is priced at $900 Downs for Jan/Feb and $880 Narrabri for Dec/Jan. Old crop still holds its gains though currently no immediate demand is sought for the remainder of 2018, $830 Narrabri Jan/Feb is the strongest seen at time of writing.

This week we have seen positive progress on 2019 bale prices as well as for 2020. Though this could potentially deteriorate depending on how current overseas relationships blossom. With China agreeing last month to promptly buy the US’ agricultural goods, especially cotton, this could very much drop the basis here at home. If the Chinese were to shift to predominantly American cotton, it forces our supply to take quite a hit. As I have said over the past few months regarding this trade war, watch this space! Prices today for seasons ahead now stand at 2019 $6202020 $592 and $542/bale for 2021 and 2022 (at time of writing).

AgVantage Commodities Market Report 6/12/2018

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Fact of the Day – World Soil Day (WSD) is held annually on the 5thof December. The reasoning is for a means to focus attention on the importance of healthy soil and advocating for the sustainable management of all soil resources.

No substantial rain has occurred in the last week, though there has been increasingly warmer and windier days, with the next week to be not so different. So far we have escaped a very warm November looking back on last years, though now December is here, above 35 degrees are looking to be the norm until the New Year, at least. With summer set to be no different heat wise, the already lack of rain around the area, specifically the Downs is being reflected through the current Sorghum prices. Ex-farm pricing for the Moree/Goondi area has been floating at the $340-350 level, though for growers on the Plains, the $380-$385 in to Newcastle is also just as appealing. Marketing of new crop is quite delicate at the moment considering the production uncertainty and the tough January and February we could potentially face.

The summit over the weekend in Buenos Aires was stirring, but did not resolve as much as we had hoped, especially on the topic of tariffs. Specifically touching on Chinese and US relations, the back and forward of taxing has looked to have stopped with the leaders looking to resolve the mess in a proposed 90 day window. The whole scenario was a bit anti climatic, but China has agreed to purchase an important amount of US products, with agriculture goods commencing immediately. This is to reduce the current trade imbalance. None the less, it is positive progress for getting the relationship back on track heading in to 2019.

As stated last week, overseas demand has subsided on buying both our old and new crop Chickpeas. Bangladesh still have wavering demand, and with Pakistan’s currency being devalued by about 5%, this has altered their current margins and they will struggle to put forward  bids as competitive as we are seeing now. Weather in India and Pakistan is dire looking upon their prime growing regions. Pakistan is more crucial, as December outlook is very bleak rain wise. Most buyers out of warehousing and certain sites have withheld themselves from the market this week until there is increased buying interest overseas. Container packers are keeping their bids more competitive for now as boxes and trains still are needing to be filled. This has been reflected in this week’s market prices with new peas bid Narrabri $880/mt, old at $830/mt, and the Downs $900/mt for a January delivery. Buying interest around most sites is also decreasing as we head in to the festive season.

Cotton futures have made positive gains day on day this week, though the advances have not been as impressive as we are currently hoping for. With trade talks still in limbo with the US and China, we wait anxiously on the outcome and how it will impact the market and more importantly, our bale prices here at home. Hot and windy conditions continue across the main growing regions with a harsh December looking to take incoming plants to task. Prices today for seasons ahead now stand at 2019 $6212020 $590 and $535/bale for 2021 and 2022 (at time of writing).

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