SA Market Update – 20/04/2018

Sam Davidson, Agfarm Account Manager SA

South Australian wheat cash market bids were a mixed bag this week with buyer interest apparent across grades from APW1 to SFW1. The spread of feed grade wheat to APW1 continued to narrow with ASW1 bid narrowing from -$8/MT to -$5/MT. Port data showed strong demand on the forward curve with 141.8KMT of wheat for export in May Ex: Port Adelaide.

Looking ahead we expect a warmer and drier than average April to remain supportive of wheat markets as well as this week’s announcement of Chinese tariffs on US sorghum. Downside risk should become apparent once the season breaks and buyers gain more confidence on the size of the new crop. However, once this rain occurs the impedance for trades to own old crop coverage has the potential to reduce, potentially seeing a $5-10/MT slide lower in bids.

Domestic markets remain an offer dominated market with buyers actively seeking any offer for exfarm or delivered buyer for April-May. We saw at least a $6/MT gain for SFW1 bids delivered into the North Adelaide market this week.

Barley markets finished this week relatively stronger despite a slow and sleepy start to the week. System stock bids increased by $7/MT. However, seller engagement on feed barley remains somewhat subdued with growers happy to sell bits and pieces into the market but nothing substantial.

The canola market continues to be dominated by domestic buyers which remains problematic for SA. Increasingly disappointing export data failed to show any exports on the books for April or May leaving cash markets venerable to the downside. Port zone bids are unchanged week on week as movements in offshore futures markets fail to play out in SA cash markets. This supports the argument that Australian canola traders are struggling to price into traditional export destinations.

 

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