AgVantage Commodities Market Report 4/10/2018

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Fact of the Day – In light of the Roosters NRL Premiership win on Sunday, the focus without doubt, should be on Cooper Cronk. Since his debut in the 2004, Cronk has played in eight grand finals, winning a total of five premierships with the Melbourne Storm and Sydney Roosters.

October has arrived and is showing strong signs of skipping over spring and moving straight in to another brutal summer across NSW and Queensland. The mercury is already hitting the thirties a few times a week, which is now creating even more concern on how much of a positive outlook there is for a prosperous summer crop. Rain is forecasted for later on in the week, though from where the forecast is set, it’s not much to call home about or to batten down the hatches. Wheat production abroad is on track, though there is some concern with weather conditions putting a hold on planting across Eastern Europe. Russia is also playing their own game to slow down exports by minimising use of some of their logistic terminals. Though this shouldn’t have too much of an impact for now with supply still strong across the sea. Currency here at home dropped quite intensely based off the most recent RBA report, though it has helped competitiveness for spot prices. Today’s AUD opens at $0.718.

Even though the last year has been more than intense in regards to weather conditions (September was Australia’s driest on record) and market prices, October always brings activity no matter the scale. Around the region over the next few weeks we expect grain to be harvested and sorghum and cotton to be planted if possible. On harvest, many growers will be deciding between cutting for hay or stripping grain, it is purely dependant on where one can maximise value. Regardless of the option, there is still going to be continued demand for both well in to the New Year. Current crop chickpeas are becoming of less interest as new season is set to be stripped soon. As said previously we wait anxiously on yield and quality reports as soon as they trickle off farm. New crop still lingers about $800-$810 around the Downs and Narrabri market zones. As hard as it is to wait and see, this is how most of the market stands, from sorghum to pulses. How the next six to eight weeks play out will be how most buyers and sellers set themselves up heading in to next year.

Cotton has been more than quiet the last week with the market just easing off with trade wars, global supply and current weather conditions on a global scale all contributing. Most merchants have shut up their books for 2018 season now, with sole interest on the next four years ahead. Bale prices today are much softer, though there is not much selling interest currently due to such dire conditions and lack of water for purchase. For 2018, $585 2019, 610 2020$575 and $520/bale for 2021 and 2022 (at time of writing).

AgVantage Commodities Market Report 27/09/2018

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Fact of the Day – Arguably one of the best sporting comebacks of all time, Tiger Woods roared to victory to secure his 80th career win on Sunday, and just his first in five years. He proved to the world that he is not done just yet and showed why he is the best to ever step foot on a course. The red shirt was in full swing on the final day and it did not disappoint, after multiple back surgeries and run ins with the law in years past, Tiger was back on top as the droves of thousands live and millions across the globe celebrated the man that brought golf out of the dark ages and in to the 21st century.

September now comes to a close with the middle of spring upon us. Temperatures will continue to crack the low thirties from her, which proceeds to take any moisture that has fallen out of the sky over the last few weeks. The LPP and tableands managed to get some rain this week though will need much more to look for a promising summer plant.

Not too much change in the last week on wheat traded, most are looking for info out of CQ as there is now headers chewing through paddocks. Though we will have to give it some time before we get some intel on quality and yields once the grain starts to filter through the receival sites. In NNSW, some growers look to start as well in the next fortnight due to this season being horrific in regards to weather and one of the driest winters on record. The boats do continue to roll around from the west as they are looking to have quite the bumper season as well. Though as we move in to the new year, logistics will begin to get tight and if no rain prices will continue to wreak havoc on buyers wallets. Old crop wheat delivered downs is bid at $465 for October with new crop just $10 less. Sorghum prices are firm yet trade teams are keeping one eye on the market and the other on the forecast to see how much will get put in the ground. New crop prices are big at $410 delivered downs for January onwards. Old crop sorghum is still very much sought after also heading in to the next few months of so called “Limbo”.

Chickpeas are very quiet across the globe for now, on both the buying and selling side. General targets for most are above $800, though the delivered market is roughly about $40-50 less delivered in to sites for old crop.

Enjoy the long weekend!

AgVantage Commodities Market Report 20/09/2018

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Fact of the Day – The fingerprints of a koala are so indistinguishable from humans that they have on occasion been confused at a crime scene.

The mercury has been flirting with the low thirties as of late, which for this time of year and the current conditions already being faced, is more than devastating. With recent rains falling across the NW and Southern downs, the heat is now taking its toll on the crops that have made it this far. Agronomists around the area have shared that some plants have come to head and are showing a vast difference in growth development within small areas of the same paddock. With a much reduced season on the east coast, vessels will have to continue to surge around from the south and west to keep the supply up. This once short term fix is now becoming quite a process that has not been done before on this scale. Factors such as climate, shipping and freight logistics and crop conditions abroad are all continuing to impact on how much buyers will pay and for how long. The black sea region is receiving some warranted rain which slows harvest but on the positive side improves their outlook for winter crops, though the Russian market is still one to be watched for our own good here at home. The AUD has come back stronger than where we stood 10 days ago at just under $0.723.

New crop is quite a delicate topic for now as there is crops all at different stages between central Queensland and SNSW. With Chickpeas coming off up north, it will be a little longer before we here just how they are faring quality wise, though frost has played a role for some. Further south there is also sorghum looking to be planted if not already along the border areas. Current pea price for new crop sits at $810 Downs, with Sorghum at the $390 level for March/April delivered. Wheat and Barley still stay firm for new crop at $435-45/mt, though old crop F1 is still sought after, bid at $470 in to the Downs market zone.

Cotton has been facing quite an interesting few weeks in regards to market and bale prices. The first impact has been the continued increase of tariffs between the US and China. This trade war is just a continuance of “anything you can tax, I can tax better” and it is just a constant back and forth for now. On a weather front, the hurricane has wreaked havoc across parts of the states though it is unclear on damage to current cropping areas. Here at home, nothing has changed, little to no moisture in the last fortnight and forecasting shows nothing for the rest of September. Bales today took quite a plunge due to the superpowers bickering and stand at $600 for2018, $610 2019, $580 2020 and $520/bale for 2021 and 2022 (at time of writing).

AgVantage Commodities Market Report 13/09/2018

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Fact of the Day – The Grand Canyon is indeed a very big hole in the ground. It is 446 km long, up to 29 km wide and more than 1,800 meters deep. It is the result of constant erosion by the Colorado River over millions of years.

The USDA report released the global estimates for this year’s season and all in all was  higher. The dept. of Ag moved Russian  production by three million tonne which played its hand on the market overnight, though Russia is still a huge player and this market should not be left unnoticed for too long. Our wheat prices here at home have all moved north as well coming off, one, the current state of Russian grain, the very minimised supply we have to work with and as well the struggling AUD which hit a two year low.

Demand for protein what is still sough after with APH1 ex-farm priced at $475 for the north west depending location and terms. Feed grains are trickling from both the Brisbane and Newcastle port to supply the respected market zones. Though lot feeders and graziers are still in demand for all grains, with hay and straw also being closely looked at as an avenue from the southern part of the state.

Chickpeas have been fairly quiet with demand reported to be significantly lower this season, coupled with low buying and selling demand. Old crop is priced between $765-$775 in Narrabri, with new crop holding at $800 around NSW and QLD markets.

Cotton futures dropped to end the week and are hanging on the next few days and what path hurricane Florence decides to take. For now it is a little more southbound in which deviates from cotton in Virginia, but heads towards Georgia and South Carolina.

AgVantage Commodities Market Report 6/09/2018

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Fact of the Day – On Tuesday John Millman became the first Aussie since Pat Rafter in 1999 to beat Roger Federer in a Grand Slam tournament. It was a four set thriller in which now Millman will take on Djokovic for a spot in the US Open semi-final.

With current conditions more than flaky, we have showers eventuating in to solid rain, but also going the other way with not even enough to settle the dust. On the side of agronomy just quickly, with some moisture, growers will start thinking towards the summer plant. Here we need to maintain standard methods and not get too excited by keeping watch on soil temperatures, as this can over create an over activeness of the plant. Looking at the US market, to start the week it was very quiet due to the Labor Day long weekend, but opened softer on news out of Russia. Rain on the south plains stateside gives a nice bumper heading in to the spring wheat plant, though across the pond throughout Europe, they continue to face drier than average conditions delaying sowing for the time being….here’s hoping. The Aussie dollar has had a poor week and dropped below $0.72. This is the lowest our dollar has fallen since May 2016, factors such as political uncertainty and the strength of the greenback have been the main causes.

Now, a look at domestic supply and demand across the North West and southern Downs, but also how the whole country’s grain markets will play a part in what happens next. The high prices ex-farm will continue if the dry weather endures, though we do not see a climb anytime soon until the sorghum window closes. A poor plant and dry weather would have to eventuate to get back to the $500 level seen not long ago. Cereals will keep coming from Western and South Australia, with Victoria keeping majority of their own stock for their own needs. Now even though a domestic case, we should continue to watch the EU and Russia. As minimised supply out of the Black Sea region would result in export parity rising, and take its toll on the increasing WA and SA values, thus forcing our east coast values to follow swiftly. Pulses have weakened with some rain around and sit delivered in to Narrabri and the Downs at $770 for old crop and $800 for new season.

The international cotton advisory cut the 2018 season production estimates, with the USDA doing the same, as the sub-continent looked to not have had as greater yield as expected. Markets jumped also to start the week on top of concerns of hurricane Gordon, which could be a considerable threat across the south west of the US. Here at home the moisture has only been scattered across specific areas, though one offs are not going to do anyone any favours unless September brings constant soaking rain. Bales today stand at $612 for 2018, $638 2019, $580 2020 and $525/bale for 2021 and 2022 (at time of writing).

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).

AgVantage Commodities Market Report 26/07/2018

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Fun Fact: Once a year, a majority of the great white population migrate on a sort of vacation, roughly 20 percent of the Great Whites head out to a dead spot in the middle of the Pacific Ocean. Nicknamed the “Great White Cafe” by researchers who discovered the strange behaviour, the reason is still almost a complete mystery, myths include hunting of the monstrous Giant Squid, only adding to the mysteries of the great unknown.

July is all but done, though August appears to be no change from what is forecasted. The urgency for feed grains couldn’t be more evident with logistics being the least of worries for buyers. Cottonseed, Oats, Fabas, Corn, Wheat, Barley and Sorghum being hauled across all corners of Eastern Australia for graziers and lot feeders with dwindling supplies as the dry winter doesn’t seem to have an end in sight. Grains through the Downs are still in stock but from the border south, grain is being acquired from the MacIntrye for delivery on to the plains and vice versa (SNSW to the North of the state).

Chickpeas have found some ground as of late with word coming from the sub-continent that their own values are on the up. $655 across Narrabri and the Downs with new crop at just five dollars more. The next few months will tell all as international demand creeps up and old crop tonnes are well sought after. The season obviously will be quite miniscule which will slowly start to reflect prices once word travels abroad that conditions are a lot worse than they first thought. This is also coming of smaller seasons already in previous years.

Cotton has had smooth gains in to the end of the week. General though is that supply is lagging in regards to the demand, especially with the USDA delving in to the world estimates more and more. Dry weather throughout Australia and the US growing areas continues to play its role in only elevating market futures.

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