Sam Davidson, Agfarm Account Manager VIC
Victorian wheat markets held firm throughout the week despite pressure from offshore markets and conflicting global reports in wheat production estimate. This week the USDA reported an increase in world wheat production for 2018/19, the Australian Bureau of Statistics reported a 4.6MMT loss in Australian wheat stocks, and finally on Thursday night the International Grains Council reported world wheat production will fall for the first time in six years. Any contradiction in production estimates should have an impact on local cash markets, however we just haven’t seen an overwhelming reaction this week.
The Victorian wheat track grade spreads have seen some movement over the week. The average Melbourne zone H1 spread gained $7/MT over APW1 since the first week of January, and the average H2 picked up $3-4/MT. Feed grade wheat spreads are more of a mixed bag with ASW1 narrowing by $2/MT and SFW1 weakening by an average $2.5/MT. Delivered markets managed to build on last week’s strength and go through either unchanged or slightly firmer. SFW1 delivered into the Western Districts throughout February remains at $250/MT and ASW1 delivered Melbourne/Geelong zone picked up $1/MT.
Feed barley track markets don’t appear to have carried through last week’s strength into this week. A higher AUD capped the potential of further export demand and domestic markets, whilst strong, have not had to compete against export buyers. Delivered buyer markets lifted this week with bids gaining $2/MT for F1 delivered into the Melbourne/Geelong delivery zone. Exfarm and delivered parcels of F1 into Southern New South Wales and Riverina regions reportedly traded $255-260/MT this week, indicating stable demand from feed lotters.
Canola markets experienced similar pressure to wheat this week however could not show the same resilience, and buckled -$8/MT lower. Weaker Matif offshore futures and unwavering Australian dollar strength continues to lean on local canola cash markets, with track bids dropping a further $8/MT this week. Delivered domestic home demand for January appears to have filled, with Melbourne crushers looking for deliveries February forwards at $11/MT over current track values.
Prices as at Friday 19th January 2018