The 2020-2021 water year has seen better openings than last year. Murrumbidgee General Security received 10% while NSW Murray opened with 0%. With the Murray catchments now wet, subsequent rainfall will generate inflows and see determinations increase as the season progresses. The Victorian Murray opened on 8% and the Goulburn on 35% as anticipated under the average inflow scenario.
After a dry June, the latest outlook from the BOM is indicating the chance of exceeding median rainfall in July to be low. Over the July to September median rainfall is forecast with a good chance of exceeding median inflows anticipated for August to October. At a global level, the BOM have issued a La Nina watch and the Indian Ocean Dipole is trending negative – both potential indicators of above average rainfall.
Prices in the allocation market dropped to $190-$200 across all valleys at the end of the 2019-20 season. The lack of carryover space was a major driver limiting buy demand. The movement of parking water saw the Goulburn IVT and Barmah Choke open. The openings were short-lived. NSW licence holders were at an advantage as WaterNSW started processing trades through the choke on 1 July consuming the 19.9GL before the Victorian Water Register opened a midday on the 2nd.
It is difficult to gauge the water market at the start of the season. Transactions are muddied by Forwards and Parking water. With buyers at $250/ML and sellers in the high $300’s it will take a week or two for the market to settle down. Many irrigators are taking a wait-and-see approach, hoping for good rainfall to generate storage inflows and an increase in water availability.
H2OX is expecting prices to remain around $300/ML until we see some decent rainfall events.