Sam Davidson, Agfarm Account Manager Victoria
Victorian wheat markets for 2017/18 season stock were under pressure this week. We saw a pause in demand from domestic buyers with their attention drawn to rainfall throughout NNSW and SQLD, and the forecast for next week. So far, the rain has proven to be disappointing and forecast systems throughout these regions look weaker than initially reported. Buyers would have anticipated increased selling liquidity in the northern markets off the back of this rain event thereby placing some pressure on Victorian wheat markets to move lower.
Buyer demand and grower liquidity remains the key driver for 2017/18 season markets. APW1 bids dropped slightly lower to $318-319/MT Melbourne track, and $318-317/MT throughout Geelong and Portland. The ASW1 spread also weakened by $4/MT this week, formerly trading at parity to APW1 throughout all Victorian port zones.
Premiums for higher protein wheat in the bulk handling systems were $2/MT weaker with support seen at +$10/MT for H2 and +$20/MT for H1. This is a reduction of $7/MT from previous months. Delivered buyer market demand for H1 faded away this week with delivered bids dropping off most bid sheets. Bids for H2 delivered Melbourne/Geelong zone finished the week -$7/MT with the highest bid seen at $338/MT delivered buyer July.
New crop production risk priced into new crop markets gained slightly based on lowered production estimates. Growers reported healthy weekly falls throughout Victoria, however remain reluctant forward sellers. Reduced forward selling should provide support for new crop markets and a decent break seen from here on out will have a reduced effect on new crop pricing. From here markets will be looking at how the season unfolds, and traders will attempt to position themselves around the spring finish. Something to keep an eye on.
Delivered silo feed barley markets were steady to slightly weaker this week. Melbourne sites have proven to be slightly more resilient than others, pricing anywhere from $307-305/MT track. 2018/19 – 2017/18 seasonal spread is somewhat unchanged for the week, with new crop -$15/MT below 2017/18 bids. As mentioned last week, this flags old crop sales to be complete before new crop tonnes hit the bin. Delivered buyer demand has taken a slight dip as traders’ wind up front month positions. Bids for F1 delivered July-August have been seen at $318/MT, however they’re thin at these levels with the majority of buyers sitting anywhere from $295-305/MT for the same period.
Canola markets continue to be a domestic crushers buyer market this week. Bids throughout Melbourne, Geelong and Portland port zones were remarkably higher, however grower selling remains reluctant. As mentioned previously we have seen Victorian canola markets driven by thin demand from domestic crushers buying on the spot market.
Prices as at 28th June 2018