Your Friday farmgate for the week ending Friday 18 June

ABARES this week estimated the national farm produce would fall short of the current year's record $66 billion, down to $65 billion for 2021/22. How that might get to the National Farmers Federation's target $100 billion by 2030 - just 8 years - is the burning question we've been asking on Flow.

Further opening rains for the late Victorian and South Australian season could see the next ABARES quarterly update pushing towards a new record, but what goes up must come down, and last week's excitement over a wool and canola price spike were both short lived.

Beef, however, held strong after smashing through a new barrier on the Eastern Young Cattle Indicator, begging the question - how high can the price go?

Currency

On the latest available figures, one Australian dollar buys:

• 76.12 US cents, down from 76.92 cents on Wednesday

• 84.29 Japanese yen, down from 84.65 yen

• 63.70 Euro cents, up from 63.49 cents

• 54.47 British pence, down from 54.56 pence

• 107.76 NZ cents, steady from 107.77 cents.

Water - Rainfall

Healthy rains across the Flow family lifted spirits and prices at the livestock markets, and the Bureau of Meteorology projects a happy week ahead with falls of between 15-25mm for most of the cropping districts of SA, Victoria and NSW with the central and upper Eyre peninsula and the northern Mallee likely to fall short at 10 to 15mm for the week.

The forward projection looks more generous than this week's positive falls, as the negative Indian Ocean dipole hopefully delivers more of the same where needed in the coming months.

The best rainfalls for each state for the 24 hours up to 9am Friday were 53mm for SA at St Johns station in the southern Adelaide, 12mm at Canoblas near Orange for NSW and 10mm for Victoria at Woomelang.

Water - Irrigation

Murray-Darling Basin median water prices returned to $100 per megalitre in the Southern Basin, after a month playing below that mark.

• South Australian Murray prices held at $100 a megalitre after the 10 per cent rise the week before, with the highest weekly volume traded since the 22 March trading week.

• Murrumbidgee prices lifted $1 to $83, with low trading volume.

• NSW Murray prices fell $1.90 to $90.10, with two of the last three weeks trading over 65,000 megalitres, the highest weekly trades since 28 September 2020.

• Victorian Murray prices inched up $5 to $100

Livestock

For the first time in months, prices lifted for both cattle and sheep after the woolly equivalent lagged behind their larger counterparts.

Cattle

Meat and Livestock Australia reported on Thursday afternoon that the Eastern Young Cattle Indicator (EYCI) had defied expectations to hit a new record of 913c, with the Western indicator incidentally up at 1,042c. MLA say the supply of young cattle has not risen since April, helping support Australian cattle prices in an already deprived young cattle market.

MLA attributes the pricing spike to widespread rain across NSW and parts of southern Queensland, where over 90 per cent of the EYCI eligible cattle are sold. Positive rain indicators, they say, is encouraging strong restocking activity in the eastern states.

It may be possible that the in-principle agreement to a new free trade deal between Australia and the United Kingdom also helped raise spirits in the cattle market.

Yearling steers climbed in value again this week, restockers up 6.2c to 555.5c and processors up 5.7c to 442.7c after last week's 16.6c gain. All other categories were down, vealer steers falling hardest after a 25.9c jump last week, down 5.8c to 531.4c.

Cattle - New South Wales

NSW maintained the nation's best vealer steer price this week at 536.3c (down 4.1c on the week) and also retained the eastern states' best feeder steer price at 465.9c (+3.1c). The big story however was the heavy hit on NSW's restocker yearling steers, down 67.2c this week to 502.2c (after rising 47.9c the week before). Processor yearling steers were the biggest improver in NSW this week, up 9.3c to 483.5c.

Southern NSW prices remain healthy compared to other parts of the state, although vealer steers there (530.3c) lag central west prices by 10 per cent (582.3c).

With the Wagga yards closed due to the public holiday Monday, there could be a backlog in trade returning next Monday.

Cattle - South Australia

South Australian processor yearling steer prices fell back 95c to land among the pack after last week's nation-leading price, now at 420c compared to 488.3c in Victoria and 483.5c in New South Wales. Feeder steers recovered 34.2c from last week's fall to now stand at a healthy 453.9c compared with other states. Medium steers improved strongly by 56.7c to 401.4c, although relatively low sales volumes may be contributing to the statewide price volatility.

Mount Gambier yarded 30 more head to 327 overall on Wednesday, selling to the regular field of trade and processor buyers.

Excitement is 'ramping up' towards the end of month grand opening of the saleyards' new effluent pit. Work is now underway on two new state of the art electronic loading ramps thanks to $385,000 from the state government regional growth fund and $579,000 contributed by the District Council of Grant. New roofing, pen upgrades and softfall - and new solar panels - are also in the works.

Also on Wednesday, the mood was more subdued at the SA Livestock Exchange at Dublin, with just 85 head yarded with an extremely mixed quality offering, but prices nonetheless fir for the type and condition on offer.

By contrast, Naracoorte's cattle sale numbers on Tuesday remained steady, up 9 per cent to 696 head, a second rise in the fortnight perhaps attracted by positive pricing for sellers last week. On Wednesday almost 100 head were sold by open auction. Quality was reportedly mixed with yearling cattle sought after and selling at firm to dearer rates, older types falling in price this week.

Cattle - Victoria

Victorian cattle prices are inferior to their neighbours in the vealer steer (452.3c, -14.3c) and restocker yearling steer 320c categories, in the latter case due to a bruising 150c collapse in the price at this week's markets. Prices are otherwise in the top two nationwide across the other categories. Processor yearling steers (488.3c) improved strongly by 34.9c this week.

Thursday's yarding at Swan Hill was a low 290 head, down 210 on a fortnight earlier. Only two of the three stock agencies were selling and limited numbers were attributed to the onset of winter. MLA's Jenny Kelly said despite the low offering, regular buyers all attended and the market was strong on young cattle under 450kg and processing cows with prices up 10-25c across those categories.

On Wednesday Warrnambool traded 783 head of mixed quality cattle, noting that dairy bred yearlings sold to a dearer trend.

Dairy

Despite the positive price activity as processors compete for the attention of dairy farmers, and the best season expected on record, curiously production has not been surging across Australian dairy.

The Global Dairy Trade index fell this fortnight, down 1.3 per cent to an average price of US$4,083 per metric tonne. Milk powders and butter fell 1.7 to 1.8 per cent, while anhydrous milk fat, lactose and cheddar rose slightly.

Sheep

Recent rains could, at last, bring an uplift in lamb prices, as the number of stock moving through the yards could fall across the eastern states.

The early indicators from the Eastern States Trade Lamb Indicator confirm the lift is on, up 3 per cent this week to 839c per kilogram as of Thursday.

Across the categories the signs were also positive, with - for the first time in months - upward price movement in four of the six categories reported by Meat and Livestock Australia. Restocker lambs improved best, up 29c to 828c to be just 6c short of last year's price at the same time of the year. Trade lambs rose 23c to 825c with heavy lambs (797c, -2c) and Merino lambs (729c, -4c) the stragglers.

Sheep - New South Wales

New South Wales prices have begun to struggle to rank highly compared with other states, heavy lambs the strongest performer again at 789c, Victoria the best nationwide at 821c. Consistent with the national trend, NSW prices rose in the same four of six categories with restocker lambs best improved to 881c (+38c). Mutton also firmed 28c to 666c.

Generally speaking, southern NSW prices are positioned stronger than those reported in the central west of the state this week.

Thursday's sales at Wagga recovered a third of the volume lost last week when sales halved, back up 20,850 head to 46,750. MLA's Leann Dax says the dearer trends seen last week brought sellers back to the market. Unlike last week, quality also bounced back, reported to be fair to excellent.

The Corowa yards were inactive this Monday due to the Queen's Birthday public holiday.

Sheep - South Australia

South Australian prices fell further behind from the interstate pack this week, placing in the bottom two in most categories. Restocker lambs held on to third place at 869c, bucking the trend in price falls to rise 25c this week.

As indicated below regarding SA Livestock Exchange at Dublin, prices firmed at last for sheep this week, light lambs up strongest (782c, +29c), mutton close behind at 641c (+27c) and restocker lambs 869c (+25c). Heavy lambs (763c, +22c) and Mutton are now just 1c short of the price available at the same time last year, the closest sheep have come to bettering last year's price in months.

Naracoorte yardings bounced back on Tuesday, recovering the previous week's losses - and a little more - to be up 1,964 head to 5,675. MLA Market reporter Peter Kerr indicated a large field of trade and processor buyers and a number of active restocker orders.

At Tuesday's Dublin sales, volume fell back heavier than last week's gains, down 2,000 head to 5,000 with merino lambs making up the bulk of the offering. Quality was reportedly generally good, as was competition, seeing pricing maintain a firm trend.

Sheep - Victoria

Heavy lambs continue to improve in Victoria, up again to take national top price billing at 821c (up 23c). Trade lambs were the biggest mover, up 53c to 844c and Merino lambs up 28c to 758c.

MLA noted on Thursday afternoon that the absence of sale activity at Bendigo on Monday left processors operating at the other sales to fill their contracts, perhaps contributing to better pricing this week due to tighter supply.

Horsham's yardings on Wednesday bounced back from the 1,000 head shed the week before, up 3,927 head to 7,599 with quality reported to be mostly good with excellent runs of heavy lambs off supplementary feed. MLA reports from the Horsham yards:

Processor lambs lifted 6¢ on the back of an uptick in supply of 3,457 head, taking the price to 803¢/kg cwt or $209/head. These lambs averaged 25.8kg, lighter than last week’s offering.

Mutton was softer this week on the back of lower processor competition due to limited supply of large runs.

Wool

The latest available Eastern Market Indicator has Wool slumping after the excitement of last week's gains, down 6 per cent to 1,315c per kilogram (clean) (down $78).

The most recent available data form Elders for last Friday confirms the strong increases reported last Friday, due in part to only the Melbourne and Sydney centres operating. The longer-run price trend shows the steady creep upwards since April has now accelerated into territory not seen since March 2020, when the impact of the COVID-19 crisis was first beginning to impact the market.

No data was available from Australian Wool Innovation on Thursday at the time of publication, but past reports indicated positive upward price movement.

Grains and Oilseeds

Local 2021/22 price offerings for wheat, barley and canola all slipped $1 to $6 per tonne across the Flow Family this week, but the canola price rollercoaster went back up again. The big question is whether the belated opening of the South Australian and Victorian seasons with healthy rains will change the crop projections towards another record harvest.

Wheat

International wheat prices slid back after last week's gains, down to US$290 per tonne (US No. 2 hard red winter wheat, fob Gulf) but up 1 per cent for feed wheat (A$374 per tonne) and milling wheat (A$381) at Port Adelaide, recovering from last week's slip by the same margin.

ABARES' June crop report projected that South Australian wheat productivity would be down 15 per cent despite the same area being planted as last year. As Victoria went hard into canola this planting season, wheat productivity is expected to be down 30 per cent. New South Wales production is expected to be 35 per cent lower, due in part to a 3 per cent reduction in the area planted.

AWB said on Tuesday that if the Bureau of Meteorology's projected negative Indian Ocean dipole event occurs, delivering above average winter rainfall, another 30 million tonne national wheat crop could be in the offing. However, they note the European Union and Russia are expecting large crops also, possibly denting price due to strong international competition.

Thomas Elder Markets projected this week that Russia's wheat crop estimate has risen with improved on the back of plentiful rain in May, while the Ukraine estimates had lifted slightly also.

As we track 2021/22 prices on offer across the Flow Family, wheat offers fell this week:

• NSW - Brocklesby $270.25 (down from $271.50), Grong Grong $257.25 (down from $262.25 last week), Henty West $276.50 (down from $279.50), Narrandera $261 (down from $264),

• Vic - Charlton $283 (down from $286), Donald $280 (down from $283), Murrayville and Rainbow both $275.75 (both down from $278.25), Ouyen $272.25 (steady)

• SA - Mallala $297.30 (down from $302.30), Pinnaroo $278.83 (down from $282.83), $294 at Port Lincoln and Adelaide (down from $300)

Barley

Feed barley rose 2 per cent again, as it had last week, to $328 per tonne at Port Adelaide. NSW DPI speculated last Friday that patchy Victorian rainfall could help drive prices up.

ABARES' June crop report estimated that South Australian barley productivity would be down 21 per cent, notwithstanding the same area being planted this season. With Victoria leaning heavier into canola this planting season, their barley productivity is estimated to be down 28 per cent. New South Wales barley production is expected to take a 35 per cent hit, with 5 per cent less area planted than last year.

Barley price projections we are tracking in the Flow Family:

• NSW - Grong Grong $208.25 (down from $212), Lockhart $213.50 (down from $214.50), Temora $219.50 (down from $220.50)

• Vic - Charlton $226 (down from $230.50), Donald $231 (down from $232), Murrayville $219.50 (down from $226.50) and Ouyen $218.50 (down from $219.50)

• SA - Adelaide and Port Lincoln $247 (down from $250), Pinnaroo $226.83, Crystal Brook $237.39 and Warramboo $233.61

Canola

The international canola roller coaster dipped back after rising last week from the previous week, shedding 5 per cent on the Vancouver fob indicator to stand at US$681 per tonne. Domestic pricing proved more resilient, climbing a further 1 per cent at Kwinana to $787 per tonne after last week's 5 per cent gain.

ABARES' June crop report indicated New South Wales have planted 27 per cent more canola than in the past, but production is still expected to fall by 2 per cent overall. Victorian plantings of canola had risen 11 per cent this winter, with wheat and barley area falling 6 and 5 per cent respectively. However, the poor start to the season sees ABARES estimate that canola productivity would be down 23 per cent.

Canola prices for 2021/22 we are tracking in the Flow Family range from:

• NSW - Temora $683.75 (down from $701.75)

• Vic - Charlton $695 (AWB) (down from $739 AWB) vs $693 for Graincorp, Wycheproof $675.75 (down from $736.75) vs $690.75 for Graincorp, Rainbow $672.25 (down from $733) vs $687.25 for Graincorp

• SA - Port Adelaide $719 (down from $764), Keith $690.50 (down from $735)

Hay

More analysis on hay will be provided next week in the absence of refreshed source data at the time of publication. Last week's most recent analysis can be sourced at the end of last Friday's farmgate report.