Water Market Report

Southern Basin

Market Commentary 5th December 2017

  • Resource managers update seasonal determination last Friday. Goulburn increased to 100%, there was no change in the Murrumbidgee while NSW Murray General Security increased by 4% to 39%. Water NSW will make an interim resource assessment by 8 December given the significant rainfall event on the weekend.
  • There are significant shortfalls of 850GL in Goulburn and 1,000GL in Murray before Victoria Low Reliability entitlement owners will receive determinations. With limited storage space available, the only way these shortfalls can be met is if it stays dry in the irrigation districts and continues to rain in the catchments. For a full explanation of Victoria’s allocation framework see the information sheet from the Northern Victoria Resource Manager.
  • Rainfall on the weekend was less than predicted by the BOM – a welcomed relief. Check out this video to see how the event panned out over the weekend. In terms of falls, irrigation districts received 50-100mm with some local inundation. Catchments received well over 100mm which saw streamflow increase although they are subsiding quickly as shown by the BOM 7-day streamflow forecasts. How this event translates to storage volumes will pan out over the coming week.
  • The allocation market went flat on news of the impending biblical rainfall forecast. There is no shortage of supply and with demand reduced after the rain prices are anticipated to soften further.
  • The Goulburn IVT remains closed preventing allocation being traded into the Murray system. The negative balance has increased to 74.4GL after the increase in Goulburn allocations. Even when the IVT opens it is anticipated that it will open and close regularly as irrigators shift volumes into the Murray.
  • The Barmah Choke remains closed preventing allocation being traded downstream. NSW & Victoria authorities need to agree on a standard for processing applications through the choke to provide equity to irrigators.
  • The Murrumbidgee IVT will remain closed until it reaches 15GL. It has eased out to 2.3GL.
Product Availability 5th December 2017
Large volumes available in all systems
Demand to purchase Victorian Low Reliability remains high
Purchasers are seeking High Reliability/Security at the right price
Entitlement leases across all classes are available
Murrumbidgee Forward Sale for 2017-18 delivery available
Prices on multi-year Forward Sales available in most zones

Allocation markets

Market $/ML Allocation Movement
Goulburn $75-80 100% Down
Vic Murray 6 $95-100 100% Down
Vic Murray 7 $100-110 100% Down
NSW Murray 10 $95-100 39% & 97% Down
NSW Murray 11 $100-110 39% & 97% Down
Murrumbidgee $140 33% & 95% Down
SA Murray $100-110 100% Down

Entitlement markets

Market High General/Low Movement
Goulburn $2,850 $350 Steady
Vic Murray 6 $2,950 $350 Steady
Vic Murray 7 $3,400 $350 Steady
NSW Murray 11 $4,000 $1450 Steady
Murrumbidgee $3,800 $1650 Steady
SA Murray $3,400 N/A Steady