Demand for Australian grain is pushing prices higher again as buyers recharge their pipelines.
Extra export capacity has become available in some parts of the country which is seeing buyers actively trying to accumulate and moving prices in many zones to new highs.
The large export program continues to support grain values across the country and is now more likely to be the case into the second half of the year.
On the export front the market fundamentals remain very compelling. Current values being bid to growers allows for Australian grain to remain very competitive into most major export markets.
Indian wheat is the exception. At the current elevated pricing levels, Indian wheat is proving to be very competitive as an alternative supplier to a number of major export markets.
The Indian supply chain is at full capacity, however, mirroring the challenge here in Australia. There is only so much grain that can get out the door, and generally the world is wanting more.
The more traditional exporters in North America continue to service the markets with inelastic demand for their grains.
Availability of grains from the Black Sea origins remains very challenging with the Russian Ukraine conflict still unresolved.
The fundamentals for Australian grain remain strong. In fact, at current values bid to growers versus international values, fundamentals have probably never been stronger than the past three to six months.
So here we are with APW1 wheat traded $501 a tonne in Port Adelaide last week on Clear Grain Exchange!
Yet the variability across port zones is extreme. APW1 traded $454/t Portland and $410/t Kwinana.
Similar variability is being seen across other grades and commodities between port zones.
ASW1 traded $445/t Pt Adelaide, $440/t Geraldton, $392/t Kwinana, $410/t Portland, $388/t Newcastle.
Feed barley $429/t Pt Adelaide, $391/t Portland, $355/t Kembla, $360/t Kwinana.
We haven't seen variability like this before when all ports are exporting.
Your grain price is currently mostly reliant on the squeeze to push out grain as quickly as possible and the price growers are asking for their grain.
Any extra export capacity is being met with buyers actively trying to participate given strong international values.
There's still some time for improvement in the North American crops to potentially loosen grain supply by their harvest. But reports indicate things aren't looking great there and while that's the case, Australian grain is in an enviable position.
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