WY2026/27 Water Price Outlook: Scenarios for a Dry Season Setup

The setup

WY2026/27 opens on 1 July with the most bullish starting conditions since the 2018-2020 drought:

• Eildon opening in the mid-40s — GMW regional storages were 44% full at 3 June, about nine points below last year
• Hume at 22% (663 GL), with Dartmouth's 65% the system's main buffer
• El Nino likely emerging — roughly an 80% chance during June-August, and most models suggest at least a moderate event
• IOD neutral for now (-0.34 in early June), but model probabilities of a positive IOD exceed 80% by September
• Expected opening determinations: Goulburn HRWS 30-40%, Murray HRWS 35-45%, LRWS 0%

WY2025/26 just closed at a $259/ML Zone 1A average — the highest since the drought — and, unusually, the market enters the new season with modest carryover overhang: most surplus was either sold into firm late-season prices or carried by holders who intend to use it, not flip it. Full season-close numbers are in the June market update.

History does not repeat exactly, but it rhymes loudly here. The closest analogue in the 10-year price history is WY2018/19: low opening storage, confirmed dry climate signals, and a market that averaged $366/ML on its way to a $485/ML season the following year.

Three scenarios for Zone 1A

Scenario	Probability (our view)	Conditions	Zone 1A VWAP	Peak (Jan-Feb 2027)
Bull	35%	El Nino confirms by September, positive IOD develops, winter rain fails	$400-500/ML	$500-600/ML
Central	45%	Neutral-to-dry; patchy winter rain; Eildon recovers only modestly	$300-380/ML	$380-450/ML
Bear	20%	El Nino stalls; sustained wet from August onwards	$150-220/ML	$200-250/ML

A note on the bear case: even the "cheap" scenario sits well above the $36-68/ML troughs of the La Nina years. With storages this low, one wet winter refills dams but does not flood the market with allocation — the system recovers storage before it recovers supply. The structural floor from permanent plantings does the rest.

What the bull case looks like in practice

If El Nino confirms, expect the season to play out in three phases. July-September: opening prices of $300-340/ML, grinding higher as below-average inflows confirm the determinations will be slow. October-December: the acceleration phase as horticulture locks in summer supply and the Goulburn-to-Murray IVT tightens. January-February: the peak, with prices set by what permanent plantings must pay rather than what annual croppers choose to pay. Dairy margins compress first; annual cropping drops out of the market; almonds and citrus pay whatever clears.

What decides between scenarios

Watch four triggers, in order of importance:

1. The 1 July opening determination. Goulburn HRWS below 30% would signal the resource manager is provisioning for a genuinely bad inflow year — bull-case confirmation on day one.
2. August-September ENSO confirmation. This is the single biggest repricing event of the season. In WY2018/19, confirmation repriced the market 30%+ in six weeks.
3. Eildon's trajectory through spring. The catchment's wettest months are July-October. If Eildon is not recovering by late September, it will not recover.
4. IVT behaviour in July. Early exhaustion of the first Goulburn-to-Murray tranche signals Murray-system desperation and zone price divergence ahead — see the IVT explainer for the mechanics.

What to do under each scenario

If you will need to buy: the asymmetry favours buying early. Under the central and bull cases, July-September prices are the cheapest of the season; under the bear case, you overpay modestly on the early tranche and buy the balance cheaper later. Staging purchases — half early, the rest across the season — caps your worst case without betting the farm on a forecast. Our allocation buying service runs exactly this kind of program.

If you hold carryover: you are entering the season holding the cheapest water in the market. Resist the temptation to sell the moment opening prices print above your cost — under the bull case the peak is months away. Set price targets by scenario now, while you are calm, rather than improvising in a running market.

If you hold entitlement and lease or sell allocation annually: dry years are when HRWS earns its valuation. Forward interest in season-long supply deals is already appearing; locking a portion forward de-risks your year while keeping upside on the balance.

If you are considering buying entitlement: values lag allocation by 3-6 months, and Zone 1A HRWS at $3,200-3,800/ML is already moving. A confirmed El Nino likely pushes values through the WY2019/20 peak above $4,000/ML. The cheap entry was WY2022/23; the question now is whether you believe the structural story, not the seasonal one — our allocation vs entitlement guide frames that decision.

The honest uncertainty

Every input above can move. ENSO forecasts made in June ("the autumn predictability barrier") are meaningfully less reliable than forecasts made in August. A single east-coast low parked over the catchment for a fortnight can add ten percentage points to Eildon. Our probabilities are a broker's read of conditions, not a model output — we publish them so you can see our reasoning and disagree with specifics rather than vibes.

What we are confident about: the range of plausible outcomes this season is wide, the floor is structurally higher than the last cycle, and the cost of entering the season without a plan is larger than in any year since 2019.

Frequently asked questions

What will water cost in July 2026?

We expect Zone 1A to open in the $300-340/ML range — early-June trades at $330-350/ML show the market is already pricing next season — with the 1 July determination setting direction from there. A Goulburn HRWS opening below 30% would push opening trade toward the top of that band quickly.

Is this going to be another 2019?

The setup rhymes — low Eildon, dry signals — but WY2019/20's $485/ML required two consecutive failed winters. WY2026/27 is positioned like WY2018/19, the first dry year of a sequence. Whether a 2019-style season follows depends on the winter after this one.

Should I buy now or wait for the opening determination?

Spot has already converged with our expected opening range — early-June trades at $330-350/ML mean the market is pricing WY2026/27 scarcity today, and the cheap-entry window has closed. Buying now and carrying across only makes sense if you have certain demand and believe the bull case. Otherwise, wait for the 1 July determination and stage purchases against the triggers above.

How often will you update this outlook?

Monthly, through the market updates — and immediately if a major trigger (ENSO confirmation, a determination surprise, IVT closure) materially shifts the scenario weights.

Disclaimer: This outlook is general information only, not financial or trading advice. Scenario probabilities reflect our judgement as at 10 June 2026 and will change as conditions develop. Water prices are subject to seasonal conditions, government policy, and factors beyond anyone's control. Past prices are not a reliable indicator of future prices. Seek independent professional advice before making trading decisions.