Another week has passed with no rainfall to report in key northern NSW growing areas.
There were some substantial falls in the northern parts of Queensland, which appear to have missed a lot of the cropping areas.
Cropping conditions in central and north western NSW have deteriorated in the last seven days as the recent string of dry weeks has hindered some new crop emergence.
We really need a good widespread 1-2 inches in the next week to get the new crop prospects back on track. In a continuing trend, growers are still reluctant to make any drastic old crop sale commitments while it remains dry, and the lack of liquidity is helping the values surge higher.
Values were up by roughly $10/MT for coarse grains last week, spurred on by the consistent physical requirements of domestic consumers and bulks exporters.
Feedback across the industry is pretty consistent with all participants reporting strong buying interest while seeing limited tonnes to buy.
We believe there has been some trade to trade selling taking place behind the scenes, which has been providing the market some type of liquidity in lieu of the grower not selling.
International values have firmed this week, with some new reports of expected drier conditions in parts of the Black Sea and China, spurring another round of fund buying.
New crop wheat multigrade values have increased approximately $40/MT over the last month, but there is little engagement on these values at present given the questionable condition the crops are currently in. New crop canola has been bid a very narrow range this week, with movements of about (+/-) $5/MT.
Similar to the wheat complex, growers are simply not interested in taking on any production risk without an improvement in new crop conditions.
Going forward, the question is: what will values do?
Well, at this stage it appears the biggest influencer on current values is swayed by what the grower does. And what the grower does will be very dependent of what the weather does.
In the absence of any further rainfall received in the short term, we could very well see values continue to firm as buyers attempt to price tonnes from reluctant sellers.
*Prices as at Friday 16th June 2017