Southern Murray–Darling Basin Water Market Update

Short-term rainfall opportunities remain on the radar. Forecast guidance over the coming week suggests the potential for scattered rainfall across portions of south-eastern Australia, with some models indicating the possibility of moderate totals in parts of the Basin. If realised, these events could again provide temporary relief to the market by reducing irrigation demand and improving catchment wetness.

However, as highlighted in the recent weather outlook, the broader seasonal signal remains less supportive. Climate drivers continue to point toward a drying bias through the April to July period, with growing indications of a transition toward El Niño conditions later in the year. In this context, rainfall events during the coming weeks may offer short-term reprieve but are unlikely on their own to materially shift the underlying supply outlook without sustained follow-up rainfall through autumn and winter.

Against this backdrop, allocation developments have been modest. The latest updates from New South Wales delivered no change to current announced General Security allocations, leaving the Murrumbidgee River system at 32% and New South Wales Murray at 20%.

Resource outlook statements accompanying the updates offered little encouragement for general security water users.

In the New South Wales Murray, authorities indicated that approximately 236 GL of reserve is required to support next season’s high priority commitments, with 204 GL currently secured. Under current conditions, assessments suggest no opening allocation for general security entitlement holders at the start of the 2026–27 water year. Any allocation will depend on inflows and system losses through to 30 June, as well as the forfeiture of unused allocations on 1 July.

Forward modelling also highlights the constrained outlook. Under a repeat of very dry historical inflow conditions, the current assessment indicates no change to general security allocations before 1 November 2026.

A similarly cautious outlook was presented for the Murrumbidgee system. Since December 2025, authorities have been prioritising the accumulation of reserves to support higher-priority needs at the start of the next water year. The required reserve for 2026-27 is currently estimated at 191 GL, reduced from 220 GL in the previous assessment, with 158 GL currently secured.

Despite this progress, the current outlook again indicates no opening allocation for general security water users in the Murrumbidgee under present conditions. Allocation outcomes will remain dependent on inflows and losses through the remainder of the water year, as well as any forfeited allocations at the start of July.

Forward projections further illustrate the constrained outlook. Even under median inflow conditions, modelling currently suggests allocations may reach only around 10% by 1 September and 20% by 1 November, while drier modeled inflow scenarios would result in no allocation at those points in the season.

In northern Victoria, allocations in the Goulburn River system increased by 4 percentage points to 70%, reflecting the small inflows generated by early March rainfall.

According to the Victorian Resource Manager, the improvement was largely driven by rainfall at the beginning of the month.

“Rain at the start of the month produced small flows into the major storages,” said Dr Bailey.
“These flows, plus the volumes added by rain falling directly over the storages, provided the resource for the improvements announced today.”

The Resource Manager also confirmed that the rainfall had prompted an additional update to forward outlooks.

“Outlooks are usually issued mid-February and mid-May each year,” Dr Bailey said. “With great interest about the benefits of the rain within a long dry period, an updated outlook will be released on April 1.”

Taken together, the latest resource statements reinforce the cautious tone already present in the market. While the small allocation increase is supportive at the margin, the overall resource position across the Southern Basin remains relatively tight. Storage levels in several systems continue to sit below recent seasonal norms, and inflow generation has remained subdued despite recent rainfall.

The language from water authorities remains notably non-committal, reflecting the high degree of uncertainty around inflows over the coming months. For market participants, the message is broadly consistent with recent developments: without sustained rainfall capable of generating meaningful inflows, the system is likely to remain in a relatively tight position heading toward the 2026–27 water year. Buyers should be conscious for the possibility of a tighter supply environment into the next season.