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Grain Report Tuesday - 29th November

Our goal is to help growers and their agents determine the selling price for their grain by providing relevant price discovery each day. Check out the moves in overnight international markets and yesterday's actual traded prices across Australia. There's also market commentary giving context and comparisons to prices of international physical markets. If you need to change your offer price, simply edit it before market open.

What price do you want for your grain?

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)

  • The world wheat markets are in free fall – run for the hills.....This seems to be the feeling in the market, pretty much driven by Chinese Covid lock down policy. But whilst the wheat future exchanges all fell away, corn and beans firmed.

  • The US Chicago wheat futures, which is the futures market for their base grade wheat (Soft Red Winter which is like ASW but red), is 16 cents / bushel (~USD6) lower today than what it was same time 12 months ago. I honestly do not think the world is better shape this year than last year.

  • We have a small invasion happening in the Black Sea region which reduced Ukraine commodity output by 30+ million MT. I am not sure where that gap is being filled from.

  • The stocks held by the major exporters; a major price driver, is forecast in the last USDA World Supply and Demand Estimate (WASDE) to be around 54 million mt or 3 million mt less than the previous year. And this stock figure is considered tight.

  • The other market impact that needs to be considered is the Australian crop on the East Coast. There have been crop losses and lower test weights, which will see lower production. WA and SA will produce 18 million mt of wheat, but will QLD/NSW and VIC produce 15 million MT to bring Australia up to 33 million MT as forecasted by the world? We will know more in a few weeks’ time, but we are leaning to the lower side. If NSW has a 25% loss in production, that’s a 12 million MT crop reduced to 9 million MT.

  • Now, let’s add in world corn, a major wheat price driver. If corn prices hold firm, wheat gets fed to animals instead of corn. This tightens up the wheat balance sheet, which drives prices up. Australia also has a bit of SFW that will work into these markets.

  • So, with all those bullish drivers happening in the world, our ASX January wheat futures contract fell another $16.50 pmt yesterday to $407 pmt. And that is after our currency fell away!

  • I keep banging on about world values, and our values reaching export parity on the East Coast. The West Coast is a different story with exportable production greater than elevation capacity, and the prices are in the growers’ hands, but the bids will not be at parity.

  • But on the East Coast, if we have a lower crop and export capacity greater than the exportable surplus, prices must move to export parity, and the domestic market will need to work to keep grain from leaving on boats, or our cows go hungry.

  • Approximate Export Parity Numbers:

    • APW Wheat ~ USD360 FOB = AUD$490 Track (and ASX is $407 today….)

    • ASW Wheat ~ USD330 FOB= AUD$440-$450 Track

    • SFW Wheat ~ USD290 FOB = AUD385 Track

    • BAR1 ~ USD300 FOB = AUD$405 TRACK.

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