Sam Davidson, Agfarm Account Manager VIC
We saw another volatile week in Victorian grain and oilseed cash markets as both buyers and sellers react to weather events.
The Australian bureau of meteorology’s spring outlook report issued earlier in the week showed just how tough the growing season has been this year. Winter provided Victorian growers with above average wind and below average rainfall which, placed significant pressure on soil moisture. Levels reported to be sitting below average for most of the state and the Victorian spring outlook does not look much better. Drier and warmer weather is forecast for most of Victoria throughout September with El Nino probability unchanged at 50%.
We did see 10-20mm of rainfall in parts of the Wimmera and Mallee only to be followed by two frost events on the 28th and 29th of August. Plant available moisture is estimated to be 10-20mm with crops using up to 1mm of moister per day.
Wheat markets are particularly volatile as buyer’s are content with “hand–to–mouth” rationing for the time being. We have seen delivered markets show the largest swings with SFW1 into Griffith September/October bid anywhere from $410-425/MT in a matter of days. SFW1 bids for the Melbourne/Geelong delivery zone showed more of the same instability as buyers shifted between $390-402/MT for the same September/October delivery period. 2018/19 season H1/H2 wheat bids into Melbourne mills moved up $4/MT to $420-415/MT for a January/February but struggled to gain much traction with sellers due to the current seasonal uncertainty.
Barley markets have been tricky to define this week with thin trading volumes and lower than usual trade interest. This is likely due to tight unsold stocks and lack of seller liquidity with many growers happy to either carry barley in the BHC system for further market upside, or outturn unsold parcels for either exfarm marketing or onfarm stock feeding throughout spring.
Canola markets continue to show signs of recovery, however due to the seasonal conditions and bullish sentiment from growers unsold on both the spot market for 2017/18 season and forward markets for 2018/19 season, selling liquidity and grower engagement feels to be the lowest, relative to barley and wheat markets. Buyers for both new crop and old crop are predominately domestic crushers who are actively and enthusiastically looking for offers. Tighter carry out should see further upside in this market but price direction will be determined by the Victorian spring finish.
Pictured: Lentils 45km north of Sealake Victoria
Prices as at 6th September