Sam Davidson, Agfarm Account Manager SA
Rainfall throughout the state has reduced production risk just enough to see an uptick in forward selling this week. The weather forecast shows a series of low fronts to arrive in SA cropping regions over the next 8 days. These fronts have the potential to deliver anywhere from 5-15mm however we will have to wait and see how much is realised.
While the recent low fronts have produced some welcomed rain throughout the state, they have also delivered damaging wind. Gusts of up to 100KM/Hr are a frustrating nuisance for growers trying to spray, spread or complete any paddock work over the past two weeks, but has a low potential of impacting yields.
Spot and forward markets delivered into bulk handling sites managed to not only hold but build on their relative strength this week with 2017/18 season feed barley gaining $15/MT and 2017/18 season wheat lifting $10/MT. Delivered buyer markets are providing support for ASW1/SFW1 wheat with both south east and northern Adelaide market zones lifting $10/MT for August/September delivery.
New crop wheat markets on the other hand did not show the same increase as their spot market counterparts. APW1 multigrade bids only gained $1/MT week on week. While this might be reflective of increased selling activity attributed to lower production risk, it might also be on the back of a speculative move lower from buyers as they reduce the current risk priced into the forward market.
The South Australian grain market function for both new and old season crops remain determined by north east Australian end users. Grain and oilseed stocks will need to be shifted from surplus regions into deficit regions at the lowest cost of execution, reducing the weight of influence from offshore markets on the Australian markets. We have seen grain freighted from south eastern regions of South Australia via ocean freight to QLD/NNSW, and even road freighted into the Southern NSW and Western Vic over recent weeks.