Giles Ditchfield, Agfarm Account Manager VIC
Current temperatures have been unfavourable for summer spraying this week, with most growers being required to start early and finish before the day warms up. We are expecting to see temperatures in the high-30s to low-40s this weekend so it looks like this trend will continue. The 8 day BOM charts show some respite to these temperatures, with 5-15mm of rain on the forecast. Some areas in north and central Victoria could receive up to 25mm.
We have seen very little market movement this week as a result of the strengthening Australian dollar against the US. We have finally seen the US dollar weaken, which in turn should impact on the market values for coarse grains. Wheat and barley both benefitted from this weaker USD and fund position shorts, however the local canola cash markets will again be in decline on the back of weaker MATIF futures and stronger Australian dollar relative to the Euro.
Buyers are targeting particular grades throughout Victoria, as they look to fill their positions. We have seen strong demand on the track for H1, H2, APW1 and F1, however this higher interest is generally site-specific. It is the buyers who have length on the stem who are actively bidding.
We have seen the delivered markets continue to strengthen for both prompt deliveries and February-March contracts. F1 delivered Melbourne port at $255/MT was unchanged week on week, however, SFW1 delivered Western Districts has increased another $2/MT. Exfarm and delivered parcels of F1 continue to be well priced into Southern NSW and Riverina, with trades going through at $260/MT, $5-$10/MT in front of the wheat values.
Those who have grain on farm have been happy to hold at the current levels as they still feel bullish about the current prices. However, the shipping stem for February has contracted by 50,000MT week on week. This highlights the impact the strength of the Australian dollar is having on the free on board market.
Pictured: The 8-day national forecasts highlights a range from 5-25mm rainfall across Victoria over the coming week.
Prices as at Thursday 25th January 2018