Sam Davidson, Agfarm Account Manager SA
This week we saw oilseed and cereal markets coming under some pressure from forecast rainfall throughout SA and VIC next week. The improved outlook has seen APW1MG and barley prices walk lower. It remains to be seen if growers will be lured into selling at lower levels, however a decrease in production risk might just be enough to tempt those unsold into taking at least some cover on the forward market.
Old crop values on the other hand have remained well bid due to relative tight stocks, however there just doesn’t seem to be enough volume trading to define market direction at this stage. Delivered buyer markets for 2017/18 SFW1 to either the eastern South Australian or northern Adelaide market managed to pick up $5/MT week on week and APW1, H1 and H2 Port Adelaide bids were one or two dollars either side of unchanged.
The rain forecast for northern NSW and southern QLD should have flow on effects for South Australian grain markets. As previously stated the function of the South Australian market 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. The current speculation of increased sorghum production throughout northern Australian markets might have a continued bearish influence on SA markets, however we still need to determine how tight NSW and Queensland stocks will be after this rain event.
Photo: Cereal crop Loxton SA
Prices as at 23rd August