Weekly Water update - 12th July 2021
Firstly, welcome to a new water year – I had to look back to early May since my last send-out. With the seasonal roll over of water markets now out of the way it’s back to a normal market focus. My last send out was in early May where I was spending a lot of time looking at carryover balances and where this allocation would find a home for 30 June, we saw strong selling pressure to close off the Murrumbidgee markets and a clunky June for the Murray valley once NSW sent its annual 200GL across to Vic, and even the Goulburn back trade hit its limits in the final days of June. Here is how the carryover balances wound up:
Murrumbidgee: 26% or 492GL
NSW Murray: 39% or 653GL
Vic Murray: 699GL
Goulburn: 790GL
The Goulburn IVT arrangements have now been altered for this season meaning that of this 790GL, only 200-230GL of this water will move back to the Murray this season – I suspect there was more like 350-400GL that was transferred onto Goulburn accounts in June. So this particular valley/zone is well supplied for the season ahead in conjunction with their anticipated 100% allocation. Allocation pricing is opening at ~$120/ML. Possibly a 10-12% increase on allocations this Thursday.
In the Murray valley, events are shaping up as a somewhat normal sequence. We should expect to see allocations build for both NSW and Vic into the spring, inflows are looking good at this stage, any perceived supply shortages from the Goulburn will likely be taken up from ordering against Murrumbidgee flows later in the summer. Above choke pricing is finding buyer interest at $110/ML, downstream below choke at $170-$175 today. My call is a 10% increase to General Security allocations – and 8-10% on the Vic entitlement.
The Murrumbidgee continues its favourable conditions with opening allocations at 30%, with current dam levels and flow rates for both airspace and contribution from below the wall tributaries we can expect plenty of supplementary opportunities in the coming 2-3 months at least, and a quick release of allocation to entitlement holders. Allocation pricing had peaked at $120/ML last week but there is considerable anticipation in this Thursday’s announcement and markets are quiet overall for trade. We call a 25-30% increase to General Security this week.
Overall, most markets in their respective zones are still finding their natural point of consistency to commence the season – it’s only the second week of July and a further 50 weeks to go for a season so assessment of your position is welcomed. Allocation will build well into the spring with the exception being the Murrumbidgee valley which will quickly accelerate its allocations given the likelihood of a spill from both dams. The Bureau is calling for above-average rainfall patterns in the coming 3 months however a long way to go and as can be seen with the slow start for the NSW Murray – I expect these allocation to gather momentum from September onwards. River operations are still difficult to gauge at this early point in the year but it would appear that there will be opportunities for both the Goulburn earlier in the season than previous, and the Murrumbidgee during the peak of summer/autumn. If you would like to understand your options for Inter-Valley trade call to discuss.
Quickly on permanent water, we are taking buyer enquiry for Murrumbidgee High Security at $7,300/ML inclusive of 21/22 allocation. General Security in the same area is being bid at $2,250-2,300/ML including 21/22 allocation. With allocations increasing year on year the General Security position is becoming attractive again for buyers.
Allocation markets:
Murray River below choke - $170-$175
Murray River above choke - $110
Goulburn – $120 (thin trading)
Murrumbidgee - $115
Permanent Entitlement markets:
Murrumbidgee High Security – offers at $7,300 wet
Murrumbidgee General Security – offering $2,300-$2,350 wet
Murray (above choke) General Security – offering $1,700 wet
300ML Lower Murrumbidgee Zone 2 Groundwater DRY – $4,000
Sellers sought for Temporary Supplementary within MIA – CALL to discuss pricing
As always, please call to discuss any enquiries or requirements you have.
Regards,
Grant Volz
Director – Terra Ag Rural Agencies
Unit 30, 16-24 Whybrow St, Griffith NSW 2680
M: 0418 916 031
F: 02 6964 6095
