Giles Ditchfield, Agfarm Account Manager VIC
It’s been another interesting week in Victorian crop conditions and markets with hot and windy temperatures around the state, and ABARES and USDA both releasing crop estimate reports.
There is still no rainfall to report and little expected in the next week which is causing high levels of stress throughout VIC. 10-15mm of rain now would see the crop get through another few weeks, however the warm and windy days when the crop is already stressed from lack of moisture is having a considerable impact on the potential of Victorian crop yields. Earlier this week ABARES forecasted Victorian wheat yield will be down 33% year on year, barley 29% and canola 27%. It has just been one of those seasons where The Mallee, Central Vic and the North East really haven’t received 25mm plus in one fall to set them up.
The biggest talk from growers this week was how much crop they’re growing through to head and what percentage they will cut for hay. The biggest factors considered when making this decision is the price of hay and if there is enough bulk in the crop. Unfortunately, the frost continues to cause damage in many areas, with more growers very concerned about the next few weeks as the frost window hasn’t passed just yet.
Buyers continue to be “hand–to–mouth” when it comes to covering off their positions. SFW1 delivered into the Griffith markets continue to be traded at $425/MT for Sept/Oct and Jan delivery. We are seeing buyers biding out the curve as they look to cover off their long-term positions. The Griffith market’s drawing arc continues to draw grain away from delivered Melbourne.
Prices continue to gain momentum as the trade try and price out the current risk factors that may impact the crop. The trade wants to see volume come to the market, however most growers are happy to sit back and monitor the market and the current crop conditions before they commit anything as this is the type of environment you don’t want to be washing contracts out. New crop wheat on the Melbourne and Geelong track has risen sharply to $420/MT track while Portland is currently at $414/MT.
Growers feel both the old and new crop canola market has plenty of upside to it, as the area planted was reduced dramatically and lack of moisture will limit the yield potential. In recent times canola hasn’t followed the wheat and barley trend, however we are starting to see it be priced accordingly.
The barley market has been flat week on week with limited buyers interested in old crop tonnes. Old crop barley delivered Melb/Geelong is $390/MT while new crop is $404/MT. Tonnes remain tight with most being sold to livestock producers. We have seen Spartacus being paid as a $30/MT premium over feed in the track market, which has seen some interest from growers over the last couple of weeks.
The next few weeks will define the season, fingers crossed we all get a kind finish with some much needed rain.
Prices as at 13th September