Something to crow about for 2020
By Matt Wallis
For the second consecutive weekend the cropping belt from Central New South Wales through to South Australia has received welcome rainfall providing additional opportunity for farmers to capitalise on the season, boosting yield potential with an added nitrogen application. Meanwhile our Western Australian counterparts largely missed out on the most recent event, recording only 10-20mm to the south of the state.
The most recent Normalized Difference Vegetation Index (NDVI) data really highlights the mixed crop conditions in Western Australia. The weighted average data suggests that crops are struggling throughout Geraldton and the far north area of Kwinana with Esperance currently slightly below the long-term mean. The Merredin and lower lakes area lifts the overall Western Australia weighted average to in fact illustrate a stronger NDVI reading than the 2019 and 2018 cropping seasons for the same time of year.
Without shooting the lights out, all major cropping zones throughout South Australia show the NDVI readings trending above the long-term mean. Although still above the mean, the South Australia Mallee appears to have plateaued throughout June.. Rain over the weekend will improve this zone, the same can be said for the Crows where improvement is all you can do once you’ve hit rock bottom.
Victorian crop conditions speak for themselves with the state average displaying a reading slightly stronger than 2016 for the same time of year. The North Central and Western District zones are the clear standouts where the Western Districts position at the upper boundary of the long-term average for this time of year.
Biomass growth throughout New South Wales continues to surge and today the weighted average across all cropping zones for this time of year well exceeds the previous six seasons. All major regions across Port Kembla and Newcastle zones are displaying growth at levels equal to or far exceeding that even of 2014 year to date. This data supports the rising levels in confidence and hence forward sales we have been seeing throughout Southern and Central New South Wales.
Moving further north into Southern and Central Queensland, conditions represent that trending towards an average season. Having said that there is still ample time for this crop to bust the bins given we have only just passed mid-June.
Overall, the NDVI data strongly supports the most recent ABAREs report where the total winter cropping production was forecast at 44.52 million metric tonnes. Of that, 26.7mmt was wheat, 10.6mmt barley and 3.2mmt canola. Given the BOM are still forecasting a wetter than average August to October period the year is most certainly set up in absolute favouritism for a bin buster.
To finish on a high, new crop canola pricing is still priced between a decile 8 and 9 within the Port Kembla zone and greater than two times that of wheat showing extremely strong relative value. Given current and forecast climatic conditions maybe 2020 is the season where growers re-enter the space of forward selling canola after likely spending the last few seasons on the sidelines? As always, a balanced marketing approach is always recommended and if in doubt an AWB Representative will be happy to assist.
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