WEEK-to-week we look at the market for points of interest and ultimately it has been the same story recently.
Every grain growing nation in the world is experiencing fantastic conditions and rain continues to hit the paddock here in Australia.
The bottom line is there is going to be a heck of a lot of grain around within the next few months.
With such great global conditions and no major hiccups on the horizon, it’s difficult to see where the next opportunity will come from.
So when markets are as tough as they are right now, you sometimes have to look for value.
You may end up asking yourself, what’s the best sale value in a thin market?
For mine, the one that stands out is the new crop SFW bids getting around for the Darling Downs.
Ballpark $250 a tonne delivered end user doesn’t sound like enough when you talk about recent averages.
But when you pause to consider that Australian Premium White (APW) bids for new crop just a little further to the south, say Moree, delivered at just under $200/t, the market is paying well over what it needs to for storage, handling and freight.
In fact, at those prices you could buy the APW in the Moree depot, hold it, out turn it and deliver it up to Dalby and make a margin.
That is an example of value and it won’t last.
The Downs doesn't need to draw all the wheat from as far south as Narrabri up in the new crop positions, because at this rate we'll all be looking to export wheat out of Brisbane, once we're done with the chickpeas.
So if you were a grower in the north thinking of some new crop marketing, the delivered Downs market is the first place to attack.
Plus the SFW market provides you with room to move if the quality doesn’t hit the milling specs.
With such a great start to the winter cropping season here and more rain forecast, there is a good chance we could see a lot more feed wheat this season.
France and other parts of the EU are currently dealing with quality issues as the soft wheat crop continues to lose condition.
Local sources report only 49 per cent of the crop is in good to excellent condition compared to 75pc for the 2015 crop.
We wouldn’t be viewing this news as bullish by any means for Australian cash prices, however as we have said all along it is something to watch.
Futures markets will continue to show stages of volatility so long as there is weather concerns discussed between the large funds over there.
So overall we continue to battle a tough market here in Australia.
We face a wave of grain coming in from the northern hemisphere, which will only fuel the bear as time continues to tick by.
So where to from here?
Maybe take a step back and look at the factors in play.
Just where is the best value within today’s market?
