Wheat – With CBOT wheat futures up 18 cents for the week, (or A$7 per tonne) we would have expected to see cash prices up week on week. However, the buyers pulled basis back 15 cents with grower selling targets being triggered. This was most evident on Friday with futures up 11 cents yet the cash price only pushing up about $1 across the board. Good news for those with Grain95! We would now be less aggressive in cash sales for wheat (with the exception of ANW1) with Thursday nights USDA report quite bullish and plenty of carry in the wheat futures market meaning traders will want to keep remaining long. If needing to sell for cash flow or feeling undersold, we believe Grain95 is the better move than selling cash at this stage.
Feed barley – Is starting to look a lot tighter now with a heatwave hitting the eastern states severely impacting sorghum. Also a very heavy shipping program of barley out of Australia into Saudi Arabia and China is quite bullish. Similar to wheat, traders will want to remain long barley and to do that will need to ramp up buying of feed barley for this to happen. Currency will have a big influence on markets in the short term. We can’t see massive downside in barley so perhaps holding is a strategy to consider now.
Malt Barley – The marketing window for malt barley is closing by the week. Have price targets in place as this is the best way to achieve your targets. Chinese buying interest should return following Chinese New Year’s celebrations but at what level is hard to gauge. Premiums should be $20 above feed for most malt 1 varieties.
17/18 Canola – With rain forecasted across much of the wheat-belt this week, growers will look to getting some cover. Canola is the only grain to consider at the moment as it is at a decile 5-6 compared to other commodities still at about a decile 1-2. Planting expected to be up considerably due to pricing and early moisture so we suggest to get some cash sales cover at current levels.
