Markets have firmed this past week and more so in light of a disappointing weather front for this week which at the time of writing appears to be little more than 1-5mm for most areas. Allocation announcements were released this week with final announcements for the season being the 17th May which will include indicative opening allocations for the new season – overall a big focus on Menindee resource improvements and what the state sharing split will eventuate will provide much more certainty for both side of the Murray next season.

There is pulse flow currently moving through the Murrumbidgee which will trigger the Inter Valley Trade to open in coming days, the IVT is likely to close on the day of opening however subsequent delivery of Murrumbidgee water to the Murray may trigger a reopening later in May and therefore a price parity for allocation water is likely if this occurs

DPIE NSW noted in its allocation statement “NSW Murray water availability can expect a boost in coming weeks” due to Menindee inflows – it’s likely this Menindee resource will be set aside for next season’s high priority commitments including SA and also to alleviate the pressure of the borrowed Barmah-Millewa Environmental allowance. The Lower Darling areas will be very keen to understand how this resource will be utilised with management of the last available Menindee water to the MDBA remembered clearly…fish kills, water quality etc. Should high Murray river flows not be experienced by October (thus flooding the Barmah forest) this year, it is likely this allowance will be required by MDBA to manufacture a flood event through the Barmah forest/choke region of the river in spring…..a lot hinges on these spring inflows like always for Hume Dam however this year seems to be amplified by the fact that this environmental water has been borrowed 5 years in a row, and now comes with a clear deadline should rainfall disappoint…therefore Murray G/S allocations could be slowed up in the early stages of the new water year

Carryover markets appear to be showing signs of convergence which is likely driven by significant allocation balances in the Murray River now starting to move into that carryover space discussed last week – especially moving upstream above the choke where pricing is quoted at $70/ML. Not a lot of demand in the Murrumbidgee carryover space due to the opportunity cost involved with carry this season and spill risk waiting in the new season. The NSW DPIE is still noting the possibility of physical spills in spring under average rainfall scenarios which will provide for accelerated G/S allocation in the new season – possibly 60% at the beginning of September – therefore the question remains ‘what is the replacement cost for water lost if G/S allocations move through 70%?’

Overall, most water currently trading is moving into usage and not for carried over purposes with winter crop watering well underway. This week’s weather has fizzled which may see more buyers coming into the market between now and end of month to shore up balances for end of season. A reminder that Murrumbidgee River ‘intravalley’ and Coleambally trading districts will close on the 31st May, all other districts and zones are open until 30th June.

Rainfall outlook – not a lot to report however potential for some helpful falls over the catchment areas. Locally not a lot for the west, Murrumbidgee catchment this is good, for the Murray we would like to see more is a simple summation of the chart.

Allocation markets:

Permanent markets have been steady overall with recent trades of Murrumbidgee High ($7,100) and General Security ($2,250) struck on a dry basis.

Murrumbidgee Irrigation Forward Supplementary (delivery 1st July) – offering $25/ML – 1,000ML

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

Weekly Water Update - 4th May 2021

TERRA AG FINANCE - INTEREST RATES: 16th December 2020