On a positive note, central & northern NSW has received saturating rains over the last month. Whilst some areas have possibly received too much rain in the context of emerging crops, the overall benefits should out way the costs. We see growers willing to plant remaining area out to mid July. After this date we expect most growers to pull up stumps & carry any intended area for winter crop out to summer crops, or fallow through to next winter. Most areas have enough moisture to see the rain disappear for the next 2 months, but many areas will be reliant on a kind finish to the season with respect to moisture & temperatures.
Cotton prices have been firm again this past week with current crop reaching $490 per bale & new crop $500. Unfortunately, the grains complex has continued its downward trend as U.S futures continue to be sold off. This has been due to market sentiment on burdensome inventories (especially for global wheat stocks) & a firming U.S dollar on the back of Brexit. We made comment in last weeks column, that whilst we expected some volatility over the result, we also expected markets to settle down over time as they realise the sky will not fall in. The positives for Australian growers with the firming U.S dollar has been the weakening of the AUD, which has helped to reduce the effects of falling U.S futures values.
Feed quality & high protein wheat has remained steady over the last week, whilst generic milling grades have fallen away. APH & HPS with minimum protein levels of 13% is still highly sort after. The higher the protein & lower the screenings the higher the value. APH1 (min 14% protein & max 5% screenings) is still fetching above $300 delivered Narrabri with APH2 (min 13% protein & max 5% screenings) ~$275. HPS13 (min 13% protein & max 25% screenings) is $235 & HPS14 (min 14% protein & max 25% screenings) is $245 delivered Narrabri. Out of spec barley (FB2 & FBX) is still attracting reasonable spreads to FB1 of ~$185 to $200 ex-farm Narrabri depending on test weight & screenings. Sorghum 1 is bid $200 ex-farm Narrabri which has slipped ~$10/mt. Chickpeas have steadied at $925 delivered Wee Waa, with grower selling virtually non existent. Faba beans are still offered at $450 with bids around $320 delivered Narrabri equivalent. We expect some liquidity to increase in the first half of July as many growers have held on to stock for taxation purposes. It will be interesting to see if these grower will engage the lower market, or continue to hold their stocks.