Sam Davidson and Giles Ditchfield, Agfarm Account Managers VIC
Victorian wheat markets have managed to move higher week on week, with both local and northern production risk lending support to Australian cash markets. The Australian Bureau of Meteorology outlook for autumn (released on Wednesday February 28) showed a decline in La Niña, with a return to neutral conditions throughout March to May 2018. In the past, the breakdown of weak La Niña events has seen drier conditions during autumn, which logically should see an increase in new crop bids as buyers attempt to cover forward positions at the lowest possible price.
Cash markets remained relatively flat week on week despite solid rallies in offshore futures markets. Export demand remains lackluster, with the March stem showing 46KMT for Melbourne, 16KMT for Geelong and -14KMT for Portland.
Delivered markets are up $6/MT, however buyers appear to be somewhat covered for prompt demand and are now looking for April-May cover. SFW1 delivered Western Districts offered at $270-275/MT failed to connect with bids, however due to the drier seasonal outlook, growers might be tempted to move $5-10/MT higher on the offer. As always, we will have to wait and see.
Feed barley markets have again continued their recent trend and rallied, with the Melbourne Track now trading at $255-258/MT. F1 delivered Melbourne and Geelong is continuing to be well bid, however the traders are starting to get their cover into these sites and the delivery period is now being pushed further and further out. The shipping stem is one of the key factors to the current prices for delivered barley, and once we see these boats disappear off-shore the buyer interest should become very domestic orientated.
The malt barley premiums remain unchanged. In a lot of circumstances there are only one or two buyers looking to purchase malt varieties, which is a contrast to feed barley. So as a result, the malt spreads have failed to firm on the back of the rising feed prices.
Canola markets were stronger week on week, with Melbourne/Geelong track bids gaining $16/MT from last week and finishing up at $511/MT track. Both short lived export demand from buyers chasing cheap replacement stock and short positioned domestic buyers all lent support. Whilst this managed to shake out some sellers, it falls $20-30/MT dollars short of most grower offers. Lackluster export programs have dogged canola markets this season, and the immediate future doesn’t appear to have $20-30/MT worth of demand readily available. Export stem looks lean with only Geelong showing two buyers positioned for exports throughout March and nothing so far in April.
Prices as at 2nd March 2018