Sam Davidson, Agfarm Regional Manager Vic
Victorian wheat markets finished the week on a relatively quiet note. Most grades sit either unchanged to a dollar weaker with thin trading volumes and a $3-5/MT spread between grower offers and buyers’ bids.
Higher grade wheat managed to maintain a premium over APW1, with H1 bids steady at +$30/MT and H2 gaining $1/MT to +$11/MT. Feed grade wheat has been a little more volatile with AGP1 narrowing by $2/MT to -$12/MT, however ASW1 and SFW1 widened $1-2/MT from last week.
Domestic market demand for March looks to be covered with most buyer attention now turning to delivery April forwards. Growers holding feed wheat on-farm don’t appear to be overtly engaging with buyers for April-May delivery, as sentiment remains bullish due to concerns of a drier than average Autumn and Winter. Buyer strategy remains focussed on holding system stock length and buying in delivered, sellers on the other hand are happy to unload warehoused wheat and hold on-farm parcels.
This week’s port data shows wheat exports to be in line with last month’s pace, however there’s little demand placed on the stem for April with only 25,000MT booked so far ex:Geelong.
Barley markets throughout Victoria feel like they’ve hit a bit of a wall and will need some fresh demand to jolt the market back into action. March still has open demand available for F1 barley delivered to Melbourne/Geelong ports, but current bids aren’t really managing to attract selling attention. Export programs to China remain a significant driver of our cash markets, however this looks to be short term as demand from domestic buyers drop due to its relative price gain to wheat. Short term buyer demand is reflected by 2018/19 season bids for F1 inverted to 2017/18 by $9-10 AUD per metric tonne. New crop barley ex:Black Sea should start to hit the market by July. This has the potential to correct prices lower, much lower however? We’ll have to wait and see.
Canola markets continue to sag and lag along behind grain. Anecdotally grower selling targets have moved anywhere from $10-20/MT lower to $480-490/MT delivered silo. Domestic buyers appear to have picked up enough cover throughout the harvest period and are not overly active in chasing tonnes higher. Export programs from Victorian origins also remain lacklustre, and without the buying competition between the two markets canola prices have really suffered.
Prices as at 16th March 2018