Over December, Victorian prices for wheat and barley have slipped in value compared to the higher-priced markets of southern and central NSW represented in the ASX east coast futures market.
Since Christmas, the ASX futures markets have eased $3 a tonne but the Geelong-based silo prices for Australian Premium White wheat in Victoria have slipped $16 a tonne to $420 a tonne.
Wheat for stockfeed markets have also eased with the Australian General Purpose grade back $6 to $7 a tonne in both the delivered end user and delivered silo prices.
Wheat consumers, particularly dairy farmers in northern Victoria, will welcome this easing in the cost of energy grains.
Grain supplements are essential this season as the cost of irrigation water has been a substantial barrier to the production of homegrown feed on irrigated farms. Temporary water allocations have been trading at $410 to $420 a megalitre in the Murray Valley of both Victoria and NSW, up from five-year averages of $174/megalitre for Victorian irrigators and $118 in NSW.
Canola prices have also fallen $18 a tonne from their pre-Christmas rates to $564 a tonne delivered to Geelong.
These grain prices have fallen, despite stronger wheat and soyabean markets in the US and Europe last week.
Wheat and soyabean futures in Chicago were up $2.85 and $13.80 a tonne, respectively, for the week and European wheat futures were also $3.40 a tonne higher.
Canadian canola futures are also $8.10 a tonne higher this week. Futures traders were net buyers due to further encouraging signs of resolution to the US and China trade war.
Underlying the weakness in texport grains has been a strengthening of the Australian dollar.
After reaching a three-year low of US69.96 cents, the dollar bounced back to US71.19 cents on the weekend.
The US currency has weakened due to an expected slowdown in the rising trend of interest rate changes by the US Federal Reserve.
US politics and the partial shutdown of the US Government are restricting the USDA’s World Agricultural Supply and Demand Estimates.
Timing of the next report remains uncertain.
A global shortage of faba beans for the Egyptian market has driven a lift in prices for the sixth consecutive week.
This week, the pulse is $15 a tonne higher at $950 a tonne delivered to Melbourne or $920 a tonne delivered to grain packers in the Wimmera.