Sam Davidson, Agfarm Account Manager VIC
Victorian wheat markets generally finished the week stronger however an overarching market narrative remains elusive. Most notably, wheat grade spreads whipsawed throughout the week as buyers’ cherry picked stock to suite sale commitments. The largest gain on both the delivered buyer and track markets was ASW1. ASW1 delivered Melbourne/Geelong gained $7/MT week on week and $9/MT on the Melbourne/Geelong track markets. Delivered markets could gain an average of $2.50/MT/month as carry starts to price into the cost of execution for warehoused stock. With that in mind, most delivered bids could see a $2-$2.50/MT gain over the next few weeks.
SFW1 delivered Western Districts has been tracking sideways and ASW1 delivered Melbourne/Geelong was up $5/MT week on week. The SFW1 Darling Downs/Western Districts bid spread remained unchanged week on week, with Darling Downs currently priced $73/MT over the Western Districts bid, the same as this time last week.
Feed barley markets continued to move higher this week, with track market bids gaining $8/MT week on week. F1 delivered Melbourne/Geelong failed to show similar gains with the February/March bid remaining unchanged at $255/MT week on week. Malt barley premiums for Scope and Latrobe weakened throughout the Melbourne port zone this week. Both Latrobe and Scope spreads moved $3/MT lower back to +$12/MT over Feed 1 barley throughout the week. Westminster barley on the other hand is unchanged at $30/MT over F1. Demand overall remained robust for feed barley this week, however there were few instances of offers trading above market bids.
Canola cash markets were again under pressure this week with both offshore futures and a stronger domestic currency applying pressure. Melbourne/Geelong track markets lost $8/MT week on week, possibly due to an increase in grower selling. Fundamental drivers for Australian canola remain moderately supportive, however a vigorous Australian dollar is doing little for export markets. Without a change in competition between domestic crush buyers and exporters, cash bidding should remain under pressure.
Pictured: A chart of 3 month SFW1 Delivered Western Districts prices.
Prices as at Friday 2nd February 2018