Sam Davidson, Agfarm Account Manager Victoria
It has been another volatile week for Victorian wheat markets this week, with thin trading volumes making price discovery a touch more difficult than usual. Export demand has continued to taper lower with bids to Melbourne, Geelong and Portland ports showing lower value relative to northern Victorian rail sites. This reflects a continuation of strong demand from Northern NSW and Southern Queensland markets versus weaker, shallower demand from Victorian exporters.
An overall observation would be that Southern Victorian markets are somewhat covered over the near term and are therefore bidding with less aggression. Sellers are engaging the market but offer levels are a touch too high to connect a trade. New crop markets are another tough sell for growers who have not made a commitment to forward sales. Dry conditions throughout most of NSW and some parts of the Mallee and Wimmera has seen most growers happy to enter the new season unsold and speculate on prices moving higher throughout next year.
Barley markets have also been reasonably thin throughout this week. Buyers based in northern NSW are looking throughout Northern Victoria for stock to send north but offers are difficult to come by due to the relative tight supply. The low market liquidity has seen price stability over the past two weeks, but we have heard of more grower to grower trades occurring which makes it difficult to gauge where the grower offers sit. Malt barley premiums are effectively non-existent as demand sits almost solely with feed millers and livestock producers.
Canola markets on the other hand have started to show some vigour with prices holding and building from week to week. ABARES June crop production estimates forecast Australian 2018/19 canola production at 3.1MMT, down 600KMT from last season’s realised production. Many market participants believe this to a little too optimistic. As we move towards harvest growers have been willing to let bits and pieces go but are looking for further upside providing price support at current levels.
Prices as at 12th July 2018