Sam Davidson, Agfarm Account Manager VIC
Most of the state finally had a solid run at harvesting last week, and quality continues to pleasantly surprise most across oilseeds and cereals alike. Unfortunately however, these achievements were largely overshadowed by the star of the week, the weather. Despite the huge efforts and hours to get as much as possible off before the rains hit, there is still a lot of hay and cut cereals on the ground.
Harvest completion is estimated at 65% complete in the Mallee, 30-35% in the Wimmera, 20% for the Central and North-East, and 10% for the South-West.
Grain and Oilseed markets were slightly weaker last week with offshore futures, foreign exchange and harvest receivals all applying pressure. Local canola markets were the worst affected with track values moving an average of $10-15/MT lower week on week. As the canola harvest concludes and grower selling slows, cash markets have the potential to somewhat recover should domestic buyers maintain their interest and our currency continues to trend lower.
The weekend rain event throughout Victoria wasn’t as sinister as initially predicted, with Western Victorian cropping regions escaping with just 20-40mm. However, markets have seen an increase of risk priced into higher protein wheat grades. The Melbourne grade track spread for H1 wheat gained $9/MT over APW1 throughout last week as traders looked to the impending rain with understandable trepidation. The SFW1 spread weakened $10/MT as speculation of an increase in feed wheat gathers momentum. Local barley markets traded sideways throughout the week with F1 Melbourne/Geelong track prices finishing $1/MT firmer. Rain has also priced risk into barley markets with spreads for scope and westminster gaining $20/MT over F1.
This week, markets may continue to see increased bids for higher quality grain juxtaposed by lowering bids for feed grade grain. This of course depends entirely on what quality we see when harvest resumes. The two-week outlook should see domestic consumers increase demand as they look to build up stocks ahead of the Christmas break.
Prices as at Friday 1st December 2017