Tuesday, November 29, 2011

Déjà vu for NSW Harvest


Dry warm conditions have greatly helped the WA harvest ramp up, and rings true to the old saying “big crops always get bigger”. However this has placed pressure on turnaround times at upcountry sites, and even trying to get trucks at the last minute. CBH have estimated another 2.3mmt has been delivered over the last week, for a total of 5.2 mmt being received into the system. This is around 38% of expected receivals.


So far Geraldton has received 1.9mmt (+600kt over the week), this weeks deliveries were mostly wheat as canola and barley are largely done, while lupins are yet to get started. Kwinana 2mmt (+1mmt), similar to Geraldton yields have surpassed expectations, but quality continues to be inconsistent, with large pockets being monitored for sprouted grain. Albany 535kt (+350kt), high moisture and harvest bans has resulted in slow deliveries, with most loads being canola and barley. Wheat deliveries are staring to trickle in, with samples indicating sprouting. 60% of barley has been going as malt; this would be the lower compared to the East Coast. Esperance 710kt (+299kt), high moisture has slowed receivals this week, with canola mostly done and many segregation set up for wheat to cater for mixed deliveries.  

Prices fell away last week as buyers followed international price trends, but started the week firming as the halt to harvest activity and unknown quality downgrades created some further trade covering, while growers anticipate a lack of quality milling grades. The introduction of additional exotic grades to capture protein is likely in NSW.  Northern NSW bore the brunt of the rain, with Moree 218mm, Dubbo 92mm, Parkes 100mm, Deni 25mm and Culgoa 46mm. While SA and WA missed out on any heavy falls. Minimal crop remained unharvested across QLD and north of Moree, while substantial volumes were harvested across most regions prior to the rain.

The wet weather will impact on quality across central and northern NSW for unharvested crops. Minimal crop remained unharvested across QLD and north of Moree, while substantial volumes were harvested across most regions prior to the rain. It is estimated around 50% of the winter crop in NSW was harvested, with a higher percentage of the early ripening canola and barley crops making up the totals.

Regions that are greatly affected are south of Moree and East onto the Liverpool Plains, where quality is likely to be SFW1 or FED1, with higher quality unlikely. Central west crops may fair a little better, but any further events will see quality lower. Sufficient quantities of quality of milling grades in all regions of NSW and QLD are thought to be available to meet domestic and forward export commitments.

The protein spreads have widened this week, with APH/H2 +$6-$7, HPS1 +$10, this has also flowed over to lower protein. So do you hold out for more money, waiting for further price hikes in protein wheat, or take the money and run. Considering that this week’s rally was the first in nearly six months, and lower protein tonnage has been factored in the QLD balance sheet all harvest. The current APH spread to APW is high, at $103, since 1996 this spread has averaged $20-$30! You would think any further upside would be limited, but like last year the price hikes didn’t eventuate until a week or two after the heavy rain. But unlike last year the logistical bottlenecks and large trade shorts are not present

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