Copy
View this email in your browser
Newsletter | Wednesday 14 April 2021
Target the Grey Nomads! - by Tim


I have been speaking to a lot of farmers lately and nearly all of them have mentioned the issues they are having OR are likely to have with staff coming into a busy period with plenty of moisture in the ground and also irrigation dams starting to fill.
 
I hear time and time again that you can’t find locals due to increasing competition from higher paying jobs such as the mines or the Inland Rail project. Obviously backpackers really aren’t an option thanks to COVID-19.
 
One demographic that will be on the roads more and more due to zero O/S travel will be the grey nomads. I think we need to be smarter about how we can target the right people and get them to stick around for the busy periods.
 
I reckon you need to think like a traveler. They want to see new things and have new experiences but preferably they want to do it in relative comfort and with a bit of dignity intact. Maybe you should prepare a nice pad for a caravan with some lawn and a nice view, water and power.
 
Also when recruiting you might have to entice them with some activities outside of work such as fishing, bushwalking, hunting, a local race meeting etc as well as supply the organic grass fed dorper or Angus. Its not as much about the money as the experience. You might need to employ more of them and give them shorter shifts to keep them happy.
Cotton has recovered around 160 points overnight, and 260 points over the last 5 days due to a combination of weakness in the US dollar and favourable export numbers.

Higher exports have been a running theme recently, with news of China purchasing 5 and a half million bales of US cotton (there was recently a 750k increase from last month) and USDA ending stocks sitting under 4 million bales at 3.9m. These export numbers have been rising alongside the news that parts of the US that are typically large cotton producing areas, are facing dryness, leading to the probability of 2021 being a smaller crop in the US. After taking a bit of dip earlier in the month, domestic bales have also taken these catalysts on board and have begun to recover towards end-March levels with 560 beginning to look like the next target. Basis has continued to quietly decline from $24 at the start of Jan, to now currently sitting around $15-$20 for most buyers, $35-$40 under the 10-year average.
 
The price of cotton is still largely exposed to information coming to light re the worldwide recovery from COVID-19. Because of already smaller cotton supplies, there is plenty of upside for the cotton price if news of recovery crosses positively. At this point in time, there is still a large amount of uncertainty as to when or how effective a full recovery will look (experts are warning aspects like full international travel are still a few years away).

Although the Aussie Dollar has risen 1/3 of a cent the past few days, it is still down over 1 cent from this time last month. These movements are relatively flat considering US inflation data surpassed expectations and consumer sentiment rose to its highest level today since August 2010, a period where the post-GFC rebound and mining boom were running full steam ahead. This kind of data should bode well for the AUD as it generally associates with a broader sense of risk-taking in markets, leading to selling of safe-haven investment like the US dollar and investment into riskier assets such as equities and risk-on currencies such as the AUD. There is a bit of opportunity for the AUD to mover either way over the next few days with domestic employment data set to release tomorrow before lunch, this will be an interesting data point to watch now that many COVID-19 support packages including job seeker and keeper have wound up.
This chart for the last month shows how volatile the futures market has been. We think that the fundamentals paint a largely bullish picture however its difficult to pick market direction as speculators continue to shape the near term ups and downs.
COTTON ICE FUTURES
US83.02c/lb (July 2021)
Range last 30 days
78.15 - 88.78
Current AUD/Bale price
2021 - $555
2022 - $545
2023 - $505
AUSTRALIAN DOLLAR
AUD - Current 76.70
Range last 7 days
75.83 - 77.89
With a bit of cotton now being ginned we will have some more idea on quality soon. So far the cotton from CQ has been pretty good while St George has been mostly middlings with some SLM’s.
 
Our advice at this stage would be to forward sell cotton that you think will be middling (unless you want to buy time) and perhaps commit to Raw Cotton Australia the cotton you think may be SLM. (41’s)

For more information on this option please see www.rawcotton.com.au
CHICKPEAS - are chickpeas starting a "bull run"?

We are seeing some very interesting signs in the Chickpea market that are giving us some hope that demand and possibly price will be stronger into the new season. This time last season we saw prices firm for new crop chickpeas in the low $700/mt then the market fell away sharply. Most of this good pricing was due to demand for post Ramadan shipments which pushed the international market higher. Quickly after this spike the market fell away as the realisation was that India’s crop was bigger than expected. This year looks like a slightly different story. We had the rally for post Ramadan shipments but also a continuation of this rally which is shown on the NCDEX Chana futures chart below. This continuation of higher prices is an early sign that India’s chickpea crop may be smaller than the markets had expected. It is only early days but if we see the price of chickpeas remain strong there is some possibility that we could see demand improve with the potential of India relaxing import tariff or even starting import quotas to cover any short supply.

There are a few other supporting factors in the market with reports of exports out of India being very low to non-existent which also supports our theory of a lack of supply. The other factor that is hard to run away from is that most of Pakistan and many parts of Northern India have had very dry conditions during the last 3 to 4 months of the Rabi (winter) Crop season. This dryer weather will no-doubt reduce the potential yield of chickpeas being harvested now.

Drought Monitor for Pakistan and India for the last 3 months
This map shows you that both Pakistan and India’s North have been in the grips of some very dry weather for the last 3 months till the end of March. Not all growing regions are affected but a large portion of northern India is affected.

NCDEX May-21 Chana Futures price in $AUD
Current Crop 20/21: Delivered Downs $680/mt, Wee Waa $650/mt, Narrabri $640/mt, Goondiwindi $660/mt, Liverpool Plains $620/mt

WHEAT - keep an eye on dry weather in North America
We are getting to an interesting time of the year where the world grain markets can be a little volitile. Most traders are keeping an eye on weather issues internationally to protect any trades. I think I have found a weather issue in North America which could help our market rally a little. This is dry weather in many of the Spring Wheat growing areas of North America. The Canadian prairies and also the great northern plain of the US are looking dryer than normal heading into the planting season. Speaking to one trader, he mentioned that normally those areas are worried about wet weather at planting not dry weather so it will be interesting to see if the market starts to react later in the planting window.
Canadian Drought Monitor
US Drought Monitor
United States: Spring Wheat Production
The planting window for Spring wheat in the US and Canada can start as early as March if the weather conditions are right and through to the end of May, early June. It is believed that many growers in these regions will plant dry if rain doesn’t come early to get a start. We have seen very little moves in the market yet in regards to this issue as these areas are generally very safe and the belief is that the rain will come. If these areas continue to be dry, a late planting could take a potential toll on the quality that is eventually produced, as a lot of high protein wheat comes out of these regions and snow will not help quality.

One factor that seems to be holding wheat up is the corn market. As mentioned in an earlier report the corn and soy markets are high at the moment and they remain high especially while China continues to buy corn and soy at a record rate. I wouldn’t expect the wheat market to have much downside while corn stays at these levels. For example FOB corn and wheat prices out of the US are at similar levels, which is not normal as usually wheat is trading well about the corn price.
Canada: Spring Wheat Production

COTTONSEED - late harvest may help for a while
The Cottonseed market has been steady as growers start defoliating, harvesting or ginning (depending on where you are). I would expect growers are still holding on to cottonseed to sell as we wait for this late crop to finally mature. The later the crop the better for price in the near-term as most traders are normally getting cottonseed from the gins by now and buyers may start knocking on the door to pick it up. I think that our firm prices may be short lived once we get into ginning and the pressure starts. I am hearing good yield in some of the early harvested crops this year so good luck to those still to get their pickers started.

Prices Ex-Gin 20/21: Downs $365/mt, Gwydir $345/mt, Macquarie $335/mt, MIA $335/mt
The Hortometer - this is a measure of Horto's accuracy from the inception of Horto's Two Bob
 
This Editions Two Bob - Cotton will be $800 by October


Allow about 3c to 6c for delivery depending on your proximity to the port.

Forward Pricing
Please call for quotes on forward fuel pricing. 


Fuel orders - we can’t do business unless you are approved for credit with our third party supplier. Once the form is returned, approval can normally occur within 24-48 hrs. Click here to download the form CREDIT APPLICATION.

Once you have filled out email to admin@rainag.com.au and we will fast track the application for you.

2021
The new Rain Gauge Caps sporting the Rain Gauge's very own logo are finally here! Keep an eye on your mailbox if you are a previous winner of the "Rain on the Road" section (previously known as "Spot Us!") - your cap is coming soon...

Keep guessing where the Rain Ag team members are for your chance to win!

If you are a previous winner, and didn't receive your original prize, let us know, and we'll get a cap out to you.
WHERE'S WHANNY
Hopefully we've made it a little easier this week...

The first person to correctly identify where Tim Whan is in the photo to the right (by return email) will receive a newly designed Rain Gauge Cap after their next business transaction with Rain Ag.
Well, for a THIRD Rain Gauge in a row, no one guessed the "Rain on the Road" section!

So, Whanny stopped to take a break at the Boomi Pub during one of his many trips around the area. 


 

CONTACT US:

Northern Region  |  Tim Whan  |  Grower Representative  |  0448 444 015
Northern Region  |  Alex Lucero  |  Broker & Marketing Assistant  |  0437 765 367
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
National  |  Natasha Coffey  |  Administration Manager  |  0447 545 714

Facebook
Website
Email
Instagram
Copyright © 2021 Rain Agribusiness, All rights reserved.


Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list.

Email Marketing Powered by Mailchimp