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Grain Report Wednesday - 22nd February

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)

Look Out!

  • Markets mixed, with wheat off and row crops, beans and corn up.

  • Kansas (Hard Red Winter wheat) was only slightly lower as the 90-day weather forecast is not great, whilst Chicago (Soft Red Winter) was off a fair bit as their forecast is better.

  • Beans and corn markets are being driven by South America.

  • We have a new exporter from Australia; 2 farmers from Victoria sold a 35,000 tonne wheat shipment to Oman.

  • The business was done in November, which is interesting given the fact that the East Coast was being hit with rain and there was a question mark over whether we would have any milling wheat at all.

  • At the start of November 2022, the ASX Jan 2023 wheat contract was trading at $503 per tonne. By mid-November it was $470 and by the end of the month it was $403 per tonne.

  • So, our market fell away $100 over the month when this business was done.

  • Now, I doubt someone would sell 35,000 tonnes of wheat completely unhedged, as a $10 price swing is a $350,000 price change and a $100 swing is a $3.5 million change. The currency would also need to be hedged as a 1 cent change is equivalent to AUD $7 – AUD $10 per tonne price change.

  • Let’s assume they hedged the sale by buying 35,000 tonnes on the ASX, which they would unwind during the harvest, December, January when the other growers had confidence in their quality and are happy to sell APW or H2 wheat. Oman buys milling wheat, not ASW.

  • The ASX average price over December was around $407, so they would have lost on the hedge position.

  • The Australian FOB price in November when the sale was done was around USD $365 per tonne FOB (Free on Board) and currency was 67 cents, so Track Vic works back to just under $500 per tonne, a good price.

  • If they didn’t hedge the sale, the farmers would have received close to AUD $100 over December Track bids.

  • However, it's unlikely that they would leave a sale this size unhedged as that would be like riding in the back of a ute with 5 mates and the driver on his 10th stubby.

  • If they did hedge the sale depending on when the hedge was placed, it could have returned similar value back to the growers as what the market was paying in December.

  • It is a great concept. It was 35,000 tonnes and when we have a tight supply year, Australian wheat tends to flow towards Asia where we have a freight advantage and receive price premiums, so Oman may have put too many eggs in one basket.

  • Also, from a buyer’s perspective, the deregulated Australian wheat market with numerous sellers is beneficial to the buyer, not the grower. As a buyer, I would rather see 15 offers from exporters to take the cheapest price.

  • This raises another question; did Oman inquire from other sellers and take the lowest price? Usually, Middle Eastern buyers like to haggle a bit.

  • The growers could have got more in their pockets, but what will be the long term impact of more export competition?

  • Just imagine if Oman or other international customers used the Clear Grain Exchange and purchased their commodities directly through that exchange; or maybe overseas buyers are already doing that.

Most importantly we're always here to help!

Please give us a call or email if you have any questions.

Call 1800 000 410 or Email

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