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Grain Report Monday - 17th April

What price do you want for your grain?

Overnight moves in international markets and yesterday's actual traded prices across Australia are below to help you determine your price. If you need to change your offer price, simply edit it before market open.

Chart including Wheat CBOT prices, Wheat Black Sea prices, Canola ICE prices and Canola MATIF prices

Grain trade prices for Australia Grain (wheat, barley, Sorghum, Lupins, Canola, Faba Beans, Oats, Chickpeas and lentils)

Look Out!

  • Kaboom, Kansas wheat futures got sucked up by a tornado, rallying AUD $18 per tonne.

  • Chicago wheat and corn got caught in the wake and firmed.

  • Beans watched from the sidelines.

  • The reason for the rally was the market has realised the conditions in the Hard Red Winter wheat belt are not that great, with overall good to excellent rating at 27%, compared to the 10 year average of 46%.

  • The poor to very poor rating was 37% compared to the 10-year average of 21%.

  • To put this into perspective, the Tigers are currently rated at 75% poor to absolute crap this year, which is slightly better than the Eagles.

  • Kansas wheat futures are at a huge premium to Chicago wheat, at 196 cents / bushel (USD $72 per tonne) in the nearby contract and 171 cents / bushel (USD $62.80 per tonne) for the July or new crop position.

  • With such a large spread and a huge managed money short position of 11.85 million tonnes in Chicago wheat, the market sentiment is to put your chips on this market as the spread narrows.

  • For basis players, if Australian wheat returns to a positive status next year, on a forecast smaller crop, and Chicago firms, then back of the envelope calculation for APW wheat is as follows:

  • CME Dec wheat at 750 cents a bushel; Basis AUD $30 per tonne and currency at 68 cents, ASX Jan wheat would be around $435 per tonne.

  • Of course, the larger the Aussie crop, the lower the basis will be and conversely, the smaller the Aussie crop the higher the basis.

  • Last week, I used the Ruskies as a way of also calculating where our FOB (Free on Board) values and market bottom would be, based on Putin wanting to maintain a USD $275 FOB as a market floor.

  • Aussie wheat will be a minimum of USD $40 over the Ruskies, which is conservative. Last week Russia was quoted at USD $279 FOB and WA at $323, which is a $44 premium for those without a calculator.

  • This premium widens with a smaller crop but let's be a Hanrahan and keep it at $40 per tonne.

  • At export parity, with Russian wheat at USD $275 equating to USD $315 FOB WA and USD $310 East Coast, or AUD $430 FIS WA and $405 Track East Coast for APW.

  • I think I like my $30 basis over Chicago wheat at 750 cents a bushel calculation.

  • Of course, these are just numbers being written on the back of an envelope and it's April, with so many moving parts between now and Jan 2024, but prices do look supported.

Most importantly we're always here to help!

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