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This week, the temporary allocation markets across the Southern Murray-Darling Basin are seeing a rise in pricing, driven by ongoing drier weather conditions and trading behaviours causing a rise in demand.
In the Murrumbidgee, buyer demand is increasing, largely due to the hot and dry conditions affecting the region with prices rising to between $135-$140/ML. Throughout the week the Murrumbidgee IVT remained open, maintaining price parity with the Below Choke regions. Allocation announcement on Friday will see if additional supply is brought to the market but a significant increase in allocation seems unlikely at this stage.
Pricing in the Above Choke regions has risen slightly to between $115-$120/ML due to the recent dry weather. Demand remains healthy for rice, hay, and silage as irrigators navigate the changing conditions.
For the Below Choke region, similar trends are observed, with an unlikely or minimal increase in allocation on Friday coupled with warmer conditions in the past week have seen prices rise to between $135-$140/ML. Many irrigators are being selective with their purchases at this point in time, considering the potential for IVT openings, allocation increases and the low risk of spill declarations all having the potential to increase supply to the market. However, if conditions continue to be warm and dry, we may see buying demand increase.
In the Goulburn region, the IVT opening of 45GL has been officially delayed until November 14, for more information, irrigators should contact their local Ruralco water broker. Pricing in this region has also risen to between $100-$105/ML due to the recent weather. Irrigators are beginning to monitor the low risk of spill levels, hoping for carryover water to be returned to accounts.
Looking ahead, irrigators will be looking out for the allocation announcements at the end of the week and keeping an eye on the weather patterns and market developments, as these factors are likely to significantly influence trading activity in the coming week.
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