Vic Market Update – 12/01/2018

Sam Davidson, Agfarm Account Manager VIC

Victorian wheat markets saw an increase in trading activity this week as buyers return to the market after a well-earned break. Conversely, growers are back to work spraying out summer weeds and organising for winter crop sowing. Delivered buyer markets for wheat continued their upward trend with bids for SFW1 delivered into the Western Districts increasing $10/MT week on week. ASW1 delivered into the Melbourne/Geelong zone for January-March failed to gain sufficient offers at $256/MT last week. This saw the bid gain by $4/MT to $260/MT without receiving a firm grower offer. Grade spreads throughout the Melbourne port zone have seen some movement in the new year. Higher protein wheat grade spreads have increased by $2-2.25/MT to +$42/MT over APW1. SFW1 on the other hand has seen the largest recovery, with spreads to APW1 narrowing by $4.50/MT to $13.25/MT. This indicates lower than anticipated supplies of SFW1 within the Melbourne zone, and might indicate a potential further price recovery for lower grades.

Feed barley markets have started the new year with a bang. Low grower offers combined with short position end-users saw a $4/MT increase in track bids this week. Delivered buyer markets posted a similar increase with bids gaining $3/MT for F1 delivered into the Melbourne/Geelong delivery zone. Exfarm and delivered parcels of F1 reportedly traded $4-5/MT over published bids this week. Malt barley premiums for Scope and Latrobe weakened throughout the Melbourne port zone this week. Both Latrobe and Scope spreads moved $8/MT lower to +$12/MT over Feed 1 barley since the start of January. Westminster barley on the other hand has bucked the trend, gaining $2-3/MT over a similar timeframe. Gains across both system stock and delivered market bids all indicate reasonable demand entering the market.

Weaker Matif offshore futures and unwavering Australian dollar strength continue to lean on local canola cash markets. Track bids worked a further $5/MT lower this week after a somewhat promising start to the year. The delivered domestic home demand curve appears full of Melbourne crushers looking for deliveries from February forwards at $5/MT over current track values. Domestic oilseed crush margins haven’t provided as much support as anticipated this season. Forecast demand for oilseed meal from feedlotters and dairy producers remain disappointing, placing additional pressure on canola markets.

Prices as at Friday 12th January 2018

VIC pricing tables 201801124