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Grain Report Thursday - 13th 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!

  • Wheat markets were a mixed bag with Chicago wheat up and Kansas wheat off, which is interesting, as the US Hard Red Winter (HRW) crop is in ordinary shape.

  • Corn and beans were up in the nearby contracts, but softer in the back end. As much as I would like to at this point make reference to something a giggling teenage schoolboy would here; like a reference to “I like big butts and I cannot lie” or maybe the Queen song, I am not allowed too, and my wife would tell me to grow up.

  • If you look at corn and beans, the market is inverted (or softer in the back end, giggle giggle), which tells us row crop stocks are tighter now until new crop in Oct.

  • Corn falls away 100 cents a bushel or USD $40 per tonne and beans fall away 190 cents a bushel or USD $70 per tonne.

  • This inverse puts pressure on old crop beans and corn, as you would be crazy to hold unhedged old crop stocks in an inverted market; sell, sell, sell.

  • But we don’t grow corn or beans; phew.

  • However, the good news, the Chicago wheat market is a carry market, meaning new crop is at a premium to old crop.

  • Chicago wheat futures are USD $12 higher in December than the current spot month, so no pressure to sell.

  • Kansas however is at a slight inverse, of USD $7 per tonne, however, given the poor start and current crop conditions of the HRW crop, this inverse may erode.

  • You also must remember Chicago wheat (ASW equivalent) is at a USD $67 premium to Kansas wheat (APW / Hard wheat equivalent). This means, protein wheat is tight and basic bread wheat is a plenty, well in the US it is.

  • On a FOB (Free on Board) basis, US Soft Red Winter (SRW) wheat (Chicago) is quoted USD $285 FOB for May, and USD $294 FOB for November.

  • Hard Red Winter ex Pacific North West is quoted at USD $387 FOB for May and USD $382 FOB for November.

  • For what it’s worth, if we could get USD $382 FOB for APW in our new crop position, it would be AUD $535 FIS (Free in Store) WA and AUD $510 Track East Coast.

  • That’s at export parity, without our freight advantage into the Asian markets.

  • Shut up and take my money.

  • However, Hokey Pokey’s wheat is quoted USD $277.50 FOB October, which puts the market bottom at AUD $440 FIS WA and AUD $410 TRACK East Coast, if we are competing directly with the Ruskies.

  • I have used a premium of USD $40 over Hokey Pokey’s wheat, which is conservative.

  • Currently this premium is USD $46, and that’s with a record Aussie crop.

  • ASX Jan 24 settled at AUD $388 yesterday, or AUD $22 under export parity when competing against the Ruskies in the new crop position.

  • And there is nothing happening in the Black Sea market to distort or impact on Russian wheat values later in the year.

  • So, we are undervalued in the new crop position, which would make me a buyer today, however, I don’t identify as a buyer; I identify as an idiot, which is part of the majority when it comes to price forecasting

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