Market Commentary 19th June 2018

  • After good rains across the sMDB, particularly in the catchments, however the week ahead is looking cool and dry.
  • Allocation prices were soft through the early part of last week with trades as low as $160/ml recorded. Trades done at these prices were generally small volumes.Several parties seeking large volumes entered the market late in the week and prices increase above $190. As we head into the final two weeks of the 2017/18 season, we expect prices to remain volatile and highly dependent on the parcel volume.
  • BOM released their initial climate outlook for the July-September period. The main factor influencing our climate is the higher than average pressures in the south of Australia preventing cold fronts from penetrating the south east.
  • The Murray Irrigation Water Exchange closed at 5pm Monday 18 June. External transfers to/from MIL can be lodged until 5pm Thursday 21 June.
  • GMW in Victoria are accepting physical allocation trade forms up to 27 June. Online transfers can be done up to COB on Friday 29 June.
  • The latest media release from the MDBA reveals that “between 2000 and 2016, the total number of people employed in the 40 communities declined by 13 per cent…about four per cent…was due to the Basin Plan, while nine per cent…was due to other factors”.
  • An interesting article from Agriinvestor and Aither which attribute escalating prices to the decreased supply of entitlements available in the market.
  • The NSW Water Management Amendment Bill was put for the NSW parliament last week but some have concerns around the ability for the minister to temporarily suspend water sharing plans on specific grounds as reported in The Land.
  • Growth Farms is looking for $100M in capital to investment in agriculture assets and water as reported by the Financial Review.
  • The Goulburn IVT has 38.3GL of capacity for allocation to move into the Murray system.
  • The Barmah Choke is open with 45.4 of allocation able to be traded downstream.
  • Trade into the Murrumbidgee remains closed with the IVT at -13.5GL.
What is your end of season strategy?
Are you looking to buy water to carryover?
Do you need more carryover space?
Perhaps have excess carryover capacity?
Maybe you have allocation or entitlement to sell?

As at 19th June 2018, H2OX has the following water products available;

Forwards $/ML
Goulburn $240
Murray $240
Murray $240
Murrumbidgee Call
Carryover $/ML
Low Reliability $15+
High Reliability (Spill) $5+
General Security Call

Allocation markets

Market $/ML Move
Goulburn $185+ Up
Murray 6 $185+ Up
Murray 7 $185+ Up
Murray 10 $185+ Up
Murray 11 $185+ Up
Murrumbidgee Closed
SA $185+ Up

Entitlement markets

Entitlement prices have been moving rapidly.
We have the following parcels available for sale
System Class ML
Goulburn 1A LR 740ML