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Australian markets heads for soft patch

Published on 18 March, 2010, Last updated at 03:23 GMT
Australian markets heads for soft patch

Australia - All grain and pulse markets are softer this week. Milling wheat for export has eased the most with prices falling $7 a tonne in Victoria and South Australia and as much as $11 a tonne for delivery to Port Kembla, in NSW.

The best price available earlier this week for wheat delivered to Victorian ports was $197 a tonne for APW and $208 a tonne for H2. Currency movements and world markets are behind the decline. The Australian dollar hit a seven-week high, lifting almost US2c, last week.

World markets are still affected by bearish grain forecasts and a US Department of Agriculture report last week continued to emphasise plentiful current world wheat stocks. World markets were also surprised with the Chinese cancelling US soybean shipments.

Although 65,000 tonnes of soybean shipments were postponed to next season, shipments of 115,800 tonnes were cancelled. This has weighed on the oilseed markets and has added to a bearish market. As the world benchmark for oilseeds, prices for US soybeans and soybean meal have been in a steady decline since December.

Soybean production areas in the US have received favourable spring rain for planting and large crops in Brazil are swelling world oilseed stocks. Accordingly, canola meal in Australia has become more competitive for stockfeed users and is available at about $245 a tonne in Melbourne.

Stockfeed mills are now switching demand to the cheaper canola meal and have lowered their prices for grain legumes. Lupins are $5 a tonne cheaper this week, at $325 a tonne delivered to Melbourne. Mallee farmers have been storing lupins, seeking $300 a tonne on farm. With a freight cost of $30 a tonne, these lupins are now considered too expensive. Similarly, field peas for stockfeed milling are $5 a tonne lower this week at $275 a tonne delivered to Melbourne end users.

Barley for both feed and malting markets is also lower this week. F1 feed barley is now quoted at $162 a tonne delivered to Melbourne, $153 a tonne delivered to the Goulburn Valley and $165 a tonne delivered to southern NSW feedlots. Discounts for F2 feed barley vary from $7 to $15 a tonne.

Oat producers will be interested in a new price for oats this week. A buyer has appeared for milling oats for delivery to either Geelong or Melbourne port. The price quoted early this week was $210 a tonne delivered.


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