Rain Ag Road Show | Technology in Commodity Marketing
We are on the road in early March, starting in Emerald and finishing in Griffith. We hope to bring you one of the most informative and relevant marketing presentations you have seen.
Instead of you going to 5 separate meetings, we have grouped together some of the cutting edge businesses that are relevant right now in the fast-changing commodity marketing landscape.
Read all about this event, who will be presenting and the important dates and locations in the informative brochure which you can download here.
We would like to extend a warm welcome to all cotton and grain producers.
New Cotton Seed Business
We are excited to announce that we have launched a new business that enables growers, traders and ginners to warehouse seed in secure, fully insured locations, close to the gins. After running a very successful pilot last year we are keen to roll the concept out across the entire cotton growing belt.
Operating under the same brand as our lint warehousing ‘Raw Cotton Australia’ we operate the exact same way. We handle logistics from gin to warehouse and help you to sell the seed when you feel the time is right. We handle all the costs and can offer an advance to buyers and sellers.
To see a recent press article about our seed business please click here.
The Rain Ag team discussing all things cottonseed
Politics
In regards to the current and ongoing political environment around the Murray Darling Basin and agriculture in general, Rain Agribusiness would simply like to offer our support.
There is no question that farmers have come under unwarranted attack recently in the media and socially. The source of the attacks is overwhelmingly individuals either trying to leverage some sort of political or social gain or totally misinformed people who have got caught up in the hype. (there are a lot of these ones)
The good thing is that truth and common sense will ultimately prevail despite the fact it seems that the entire country is against you at the moment. Rain Ag would like to let you know that we feel for you and we are obviously 100% behind you.
Our message to you is to hang in there because it will pass, and things will go back to normal. Stay strong to your roots and keep on doing what you do best. We recognise that you are the lifeblood of all the rural communities in which we live, and Rain Ag appreciate your efforts greatly.
Stockfeed
Please give us a call if you are chasing stock feed. We can supply most products including those listed below.
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Nothing too exciting has happened since our last report. Demand is still sluggish and the trade war continues to provide enough uncertainty to keep a lid on the market.
We have however seen Aussie basis start to move in the right direction over the last week or two. I think basis has come up 200pts (about AUD$15) for 2019 crop deliveries and it’s come up 400- 500 pts (about AUD$30) for high grade cotton that can be shipped promptly.
With the Australian crop getting smaller, we should see basis remain pretty firm I think and there could be some spikes with more wash outs likely and merchant shorts.
The US new crop forecast is up at this stage (could be about 23 million bales) which is probably why futures fell 300 pts last week. The futures market remains buoyant enough for now despite the general feeling of uncertainty however perhaps we will see some real volatility just around the corner when China/US trade negotiations come to a head in early March.
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COTTON ICE FUTURES
US 71.86c/lb (May 2019)
Range last 30 days
71.01-76.14
Current AUD/Bale price
2019 - $580
2020 - $570
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AUSTRALIAN DOLLAR
AUD - Current 71.37
Range last 7 days
70.70 - 71.54
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Demand has picked up significantly over the last couple of weeks and we have been steadily selling the remaining bales in the warehouse system.
Yesterday we sold base grade cotton at $620/bale which is reflective of strong demand for high-grade cotton for prompt shipment. This is over $40 above ex Gin pricing. Logistics and handling costs are around $25/bale, therefore there is a $15 premium for having the cotton available and we expect to see this gap widen over the next couple of weeks.
For more information on this option, please visit the Raw Cotton website HERE.
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Chickpea market flat!
The Chickpea market has shown some weakness in the last month or so, with very little international demand. Early crops are starting to be harvested in the sub-continent and international buyers have pushed their focus to the upcoming crop. We have seen no yield results so far from their crop as it is a little too early to tell. In our last report, we mentioned that it was very dry across India but since that report, many of the growing regions have had helpful rain to fill pods, hence the lack of interest in Aussie peas.
I expect the market to be quiet for the next few months as harvest progresses in the northern hemisphere. Both the Pakistan buyers and the Bangladesh buyers have been absent for the last month or so, mainly due to the lower quality of the Aussie peas in the market. Most chickpeas have colour issues from Australia and both these countries are looking for lighter coloured peas. This was the main reason we saw a big discount for 'old' (dark colour) vs 'new crop' (lighter colour) peas. Pakistan has been the main buyer of the dark peas and they have now stopped buying as they wait for their new season harvest to start. Bangladesh has always been buying the lighter coloured peas and is now finding it hard to buy this grade out of Australia. Hence the lacklustre market.
Old Crop March Fixed $730 Del-Wee Waa & Trangie, Del-Goondiwindi $750, Del-Narrabri $760, Del-Downs $780/mt. 17/18 crop $40 to $60 lower.
New Crop 19/20 No definded market.
Still waiting for the Indian general election in April/May 2019. I expect we may see a little bit of a rally in the price as the government push for more votes from the farming community.
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Slow grind to the bottom!
We have seen the wheat market stuck in a sideways price pattern for several months, not just in Australia, but internationally. A lot of this is due to the uncertainty of the USA vs China trade war.
We have been caught up with our own trade war in the last few months with China stopping barley imports from Australia. This has not affected the East coast exports but it has affected price out of Western Australia. In the last few months, barley has dropped over $50/mt as the supply from Western Australia gets cheaper and starts heading to the East Coast. This has also affected the wheat market with prices dropping $30 or more.
As a consumer, the price of wheat and barley might be a good buy today. However, sellers may have to hold on for a little while if they want to get better prices.
Current Crop: Track APW Multi- Brisbane $444, Newcastle $446, Port Kembla $442 Delivered Downs SFW Feb+ $435/mt. Ex-Farm- Mar+ Moree 70/10 $420, APH2 $435, Mar+ Goondiwindi 70/10 $430, APH2 $435.
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Be careful of this rally
We have a lot of reasons that cottonseed could be so high but not all of them are due to the drought!
Two weeks ago we had a trader 'voluntarily liquidate' his business. This liquidation has put the cat amongst the pigeons. This trader (not to be named) had a number of cottonseed contracts sold to feedlot consumers and now those contracts are not going to be delivered. This has meant that the feedlots have had to enter the market to cover this cottonseed short through February and March and beyond. So, as a result, the old crop market has rallied nearly $200/mt or $750/mt delivered Downs. This trader exiting the market has also had positions in New Crop to be filled so the new crop market has rallied around $100/mt in the last month as well.
If you are a grower this is a great opportunity to sell as I think we have a lot more room to go lower than higher. Once the feedlots cover their lost contracts, I think the rally will ration too much demand for it to stay at these levels.
Don’t forget Cargill doesn’t buy cottonseed any more so that is a 300,000mt consumer gone! We may have a smaller crop, but we also have a much smaller demand base.
Prices Ex-Gin 17/18: MIA $780/mt, Moree/Namoi Valley $730/mt, Downs $750/mt.
Prices Ex-Gin 18/19: MIA $470/mt, Macquarie Valley $510 GFS $67/bale, Gwydir/Namoi Valley $515 GFS $68/Bale, Downs +$535/mt GFS +$65/Bale.
P.S. Be careful of counterparty risk this season as we are running out of good buyers!
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"We may see cotton futures firm over the next couple of weeks due to technical opportunities for the bulls in the cotton market."
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Brisbane 115.49
Melbourne 116.10
Sydney 116.06
Newcastle 116.41
Prices have risen again about 6 cents/L since our last report
Please give us a call for forward pricing options.
Our fuel service is very efficient. You call us and we will generally deliver the following day. Our pricing is very competitive and we use local carriers where possible. We only deal in B’double loads (50,000L) so you will need to be able to take delivery of this volume.
To make sure you are ready to go when you want to order, please fill in the attached credit application. CREDIT APPLICATION.
Allow about 4c to 7c for delivery depending on your proximity to the port.
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The first person to correctly identify where Tim is in the photo to the right (by return email) will receive a free carton of beer from Newstead Brewing Company after their next business transaction with Rain Agribusiness.
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In the last edition of The Rain Gauge, Peter was in Wagga Wagga.
The winner was Anton Muusers from AFF in Moree (come on everyone, we need some faster responses to beat the AFF team!! We might as well start a brewery at their office!). Well done Anton!
Learn more about Newstead Brewing Company by clicking on the can!
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CONTACT US:
Northern Region | Tim Whan | Grower Representative | 0448 444 015
National | Ian Grellman | Trade Commodities Specialist | 0448 333 959
Southern Region | Peter Horton | Grower Representative | 0448 777 358
Southern Region | Amy Billsborough | Grower Representative | 0406 872 323
Accounts & Administration | Nicole McConville | nicole@rainag.com.au
Fax: +61 2 6711 1132
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