Domestic

Nothing like a good drink …

Peter McMeekin, Nidera Australia origination manager, June 27, 2017

AT ROYAL Ascot in Berkshire (England) last week, race organisers relaxed the strict dress code for the first time in the long history of the world-famous race meeting.

Nidera Australia, Peter McMeekin

A Royal Ascot spokesman said: “We took the decision in light of the hot weather, not to enforce the jackets rule.”

The press referred to the conditions as a heatwave. Not a word, we here in the colonies, would normally associate with a top temperature of 28°C.

However, according to Wikipedia, a heat wave is measured relative to the usual weather in the area and relative to normal temperatures for the season, so maybe it qualifies.

Back to Australia, and the sweeping Dolgelly Plains near Garah in northern NSW, where the Talmoi Amateur Picnic Race Club held their annual race meeting on Saturday. No equine immortals on display, no top hats or tails, but a glorious day nonetheless.

There too, the temperature was unusual. It may be winter and almost the shortest day of the year, but the mercury reached a lofty 24°C, with only a very light, dust filled, breeze to remind patrons of exactly where they were as the horses galloped down the dirt straight, past the tents, the bar and finally the winning post.

Unseasonable weather conditions across the globe continue to attract unwanted attention.

Whilst a day at the track, enjoying a good chat and a few bevvies, may distract one temporarily from the general dry conditions and diminishing Australian production, the truth is every winter crop across the country would welcome a good drink right now.

Many regions, such as north-western NSW, the Eyre Peninsula in South Australia and the northern half of the Western Australian cropping area are getting quite desperate.

There are many thousands of hectares sown dry in these regions, so the game is not over if the rain comes.

Nevertheless, there will certainly be yield penalties and any production expectations above average would be extremely optimistic.

This hasn’t been lost on the domestic market with both old and new crop cereal values far higher today than they were on the first day of winter.

The steady pace of grower selling satisfied export demand through the autumn.

Weather hedge

However, the ‘weather hedge’ is now in play big time.

Growers are treating any unsold inventory as gold, and the shorts in the trade are struggling to find sellers.

The domestic consumer (who is inherently short) is also working the worry beads as they refresh the long range forecast each morning.

Most have seen value in the relatively low prices on offer following last year’s record harvest and have taken cover as the season has unfolded.

Rise in grower bids

However, interest in the new crop slot has certainly increased as the dry continues and production estimates suffer.

A combination of the local weather, lack of grower selling, crop issues in the northern hemisphere (highlighted in this space over the past two weeks), increasing futures values and domestic consumer interest have all contributed to the steady rise in grower bids through June.

Looking at new crop APW multigrade track bids for Brisbane, Port Adelaide and Kwinana today, they have rallied around $55/tonne, $35/t and $40/t respectively in the month of June.

Over the same period new crop feed barley values have increased $33/t in Brisbane, $18/t in Port Adelaide and $18/t in Kwinana.

In a normal production year, the prices currently on offer would certainly be attractive and profitable.

Active grower selling would temper the rally.

But as we know, this year is far from normal.

Widescale general rains are required, with follow up optimism in the long-range forecasts, before the grower is likely to engage the new crop market, despite the attractive prices on offer.

Source: Nidera Australia Weekly Market report: Peter McMeekin is Nidera Australia’s origination manager.

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