It's a dry start to the season but the commodity prices are adjusting as usual to the situation. Farmers are wondering when the rains will come to get their crops going in southern Australia, but at least the cold is keeping the mice out of the paddocks in the Riverina and away from northern and western Victoria.
The Bureau of Meteorology map for the first four months of 2021 paint a bleak picture reminiscent of the very dry start to 2019 before the recent La Niña cycle and are a harbinger of a possible return of the dreaded El Niño.
Maps from previous years to May make compelling comparisons (pictured left).
The Australian Dollar was down 1 per cent this week as it continues to hover around the 0.78 USD mark.
Water
Murray Irrigation reported on Tuesday that the weighted average sale price for water is $100 per megalitre.
Victorian Murray prices are at $95 a megalitre, compared with$205 at the same time las year and off the November 2019 peak of $945.
Prices in the NSW Murrumbidgee are steadily climbing, still below $100 per megalitre NSW Murray prices have stopped just short of $100 a megalitre but are still well down on the $200 prices at the same time last year and the peak $800 prices seen in January 2020.
South Australian Murray prices fell $20 this week to $80 per megalitre, well below the $250 seen at the same time last year and the $950 peak in November 2019.
Murray River storages are all up on the previous year except Dartmouth, which is at 64 per cent capacity. Hume is at 14 per cent, Lake Victoria 36 per cent.
Menindee Lakes are at 48 per cent capacity (825 GL) and as reported on Flow, water releases have begun as the 640 GL trigger has been surpassed activating entitlements for the Murray downstream.
Cattle
Meat and Livestock Australia report that the number of cattle on feed declined slightly in the March quarter to just over 1 million, or 7.6 per cent on year-ago levels. Those levels are 3 per cent lower than the 5-year average for the quarter. National feedlots are going strong, now at 1.45 million head.
The latest available Eastern Young Cattle Indicator stands at 886.81c with a downward run in motion, down 15.93c on last week and 18.88c over the last 4 weeks.
Thursday’s daily indicators show yearling steers moving upwards in price, albeit with only 83 head traded nationwide, to 463c/kg.
There were falls in restocker yearling steers (down 22c to 533c) and vealer steers (-19.4c, 500.9c) with all other prices relatively stable.
Cattle - Victoria
Heavy Steer prices for Victoria (409c) recovered strongly from last week’s plunge of 33.8c, recovering 17.2c to now be the best-priced in the nation.
Victorian prices for feeder steers (431.7c) are sitting in the mid-range across the nation, below those in SA and NSW.
On Thursday Swan Hill yarded just under 500 cattle who were rasonably well supplied, down 83 on a fortnight ago
On Wednesday Warrnambool trade was up again, this time rising 10 per cent to 858 head, with prices lifting for grown steers by 10 to 25c and Fresian steers up 5-10c.
Cattle - South Australia
South Australian medium steer prices continue to lead the nation after last week’s jump, still sitting pretty at 439.7c (+9.7c).
There was understandably a reported steady competition at the SA Livestock Exchange at Dublin on Tuesday with just 45 head yarded, down 105 as a decline in yardings continues.
On Tuesday Naracoorte yardings shed last week’s 323 head gain, back 104 head to 830 yarded with improved quality in weight and condition, resulting in better prices this week.
Cattle- NSW
Restocker yearling steer prices collapsed this week, down 66.5c to 508c, while all other price categories shed value such as vealer steers (513c, -19.9c). However, across New South Wales the southern NSW prices for restocker yearling steers remain strongest at 528c.
Feeder steer prices in southern NSW are just 1c shy of the Hunter as highest in the state, at 458.9c.
Wagga saleyard remains a standout for cattle prices, third highest in the nation with an average price on the EYCI 7 day rolling average at 938.97 (up 2.9c on last week), sitting third behind Singleton and Casino. The saleyard saw another fall in volume on Monday, down 590 head to 2,060 with declining quality.
Sheep
Thursday’s daily indicators show slight price improvements on that day across all categories except restocker lambs (now at 870c) and mutton (636c), which were effectively stable, while across the week restocker lambs were better 36c on the previous week with all other indicators relatively stable.
Light Lambs fell heaviest, down 20c across the week to 774c.
Thomas Elder Markets reported on Wednesday that the sheep herd rebuild is in full swing, with the number of sheep diverted to slaughter or live export running at a 12-month rolling average of 10.6 per cent, below the 14 per cent level considered to be the threshold to accept a national herd rebuild is underway. TEM say this is the first time since 2016/17 the rebuild threshold has been reached, and the latest rolling average is the lowest it has been since late 2012.
Sheep - Victoria
Victoria continues to lead the merino lamb price pack at 773c despite slipping 15c and a strong recovery from South Australian prices.
Similarly, even though they shed 5c, Victorian mutton prices remain the strongest in the nation at 664c.
On Wednesday Horsham yardings fell by a third to 6,645 with 1,500 Merino lambs on offer and across all categories quality was average to good.
Sheep - South Australia
Whilst South Australia’s light lamb prices are strongest against most states at 845c, they trail Queensland with a gob-smacking 1,294c this week.
Merino Lamb prices improved significantly (765c, +37c) this week to now sit just behind Victoria as the second best in the nation.
Naracoorte is back in business after a big drop last week, with 2,941 head more lifting yardings to 9,109. Quality was reported to be mixed with ‘something to suit all orders’.
On Tuesday the SA Livestock Exchange continued its downhill run on yardings, shedding 2,000 (on top of 4,500 last week) to 7,500 with extremely mixed quality reported. Competition however was generally very good with a full compliment of trade buyers and specialty butchers also in operation.
Sheep - NSW
Sheep prices in New South Wales sit mostly in the mid range, though restocker lambs at 918c are just shy of the top price in the nation, Queensland at 920c.
Southern NSW retains the highest restocker lamb prices within the state at 954c (+46c) but all other prices sit in the mid-range compared with the central west and northern parts of the state.
Wagga saleyard activity on Thursday fell back after 9,500 head extra came in the week before, down this week 5,500 head to 39,500. MLA reported very good to mixed quality across the range with major domestic processors dominating the market.
On Monday, Corowa recovered last week’s losses to yard 14,130 head offering more trade weight lambs with improved finished. MLA reported that some welcome rain across the apply area saw livestock agents and restockers keen to participate in lighter lots, meaning processors had to pay a premium for light lambs. Hence the market was firm to stronger.
Dairy
The ADPF reports that across the financial year for Western Victoria and Southeast South Australia, average prices climbed back in March from the September quarter lows to be slightly better than prices seen in the July quarter, now standing at $6.78 per kgMS. These prices are still inferior to the $7.45 high seen in the same quarter last year, and the 2019/20 average price of $6.95.
Global Dairy Trade prices remained relatively unmoved this week, with whole milk powder on Wednesday fetching US$4,123 per tonne and skim milk powder $3,447.
Wool
AWI reports that the Eastern Market Indicator rose this week by aroud 1 per cent, with the key indicator at 1315 Australian cents per kilogram. After recent falls the sector turned around at the auctions, with almost all of the Merino sector wools recording good price grains. Super fine types finer than 18.5 micron drew the strongest buyer attention.
Grains and Oilseeds
AWB noted that Victoria and South Australia has large parts yet to receive their autumn break, and notes that time is running out and yield estimates may fall as a result.
South Australia and Victoria may yet plant a lot more when more convinced the rain and subsoil moisture levels are right.
Nonetheless, AWB intents to continue their strong export program in 2021/22 as other parts of the nation are off to a good start, including New South Wales.
Grain Central reported on Thursday that around 70 per cent of Australia's winter crop has been planted with average to better yields in sight. Canola is going into the ground in record numbers, possibly due to break the 2016/17 production record of 4.3 million tonnes. With the reported prices being reached for canola and on the futures market, farmers can be forgiven for pivoting in that direction.
Wheat
AWB pointed out on Monday that WASDE forecast an increase of 7.8 million tonnes of global wheat consumption, driven by China's demand for feed grains.
Grain Central estimates NSW has sown 3.86m hectares of wheat, while South Australia has 2.33m and Victoria 1.64m. WA has an estimated 5m Ha planted.
Even so, ABARES reported that world indicator prices tumbled 6 per cent to US$294 per tonne, while domestic prices fell 3 per cent to A$372 per tonne for milling wheat and $368 for feed wheat.
Barley
Feed barley prices at Port Adelaide took a 5 per cent dive this week to $300 per tonne according to ABARES. This matches a usual correction in recent years at this time, the question will be whether it rallies as it has in previous years before 30 June.
Grain Central estimates that SA has planted the most barley winter crops in the eastern states at 0.87m Ha, followed by Victoria (0.84) and NSW (0.7m). Western Australia has an estimated 1.51m Ha planted.
Thomas Elder Markets this week filed this compelling report marking 1 year since China's snap 80.5 per cent tariffs imposed which Andrew Whitelaw describes as a 'kick in the guts' when it occurred during seeding. Whitelaw says China's anti-dumping tariff now looks like an overreach but the silver lining is it has forced Australian exporters to secure more diverse markets. After all, China's hunger for barley did not abate, it took barley from other countries who then could not supply their previous destinations now being serviced by Australian barley.
Canola
Grain Central estimates that WA has gone hard on canola, with 2.33m Ha planted, followed by Victoria (0.81), NSW (0.8) and SA (0.43).
What goes up must come down, and after recent strong rallies ABARES reports that this week canola (rapeseed, Canada fob Vancouver) fell 2 per cent to US$692 per tonne while domestic prices at Kwinana fell 2 per cent to A$741 per tonne.