In terms of Australian dollars a tonne, Chicago Board of Trade spot wheat futures lost almost A$56/t last week to close Friday night Australian time at A$422/t. This compares to the highs made in May of A$673/t.
It's ugly reading if you're a grain grower. Though let's remember when the CBOT highs were made in May the price discrepancy to Australian grain values was also ugly reading and in the spotlight.
If you look at grain values actually "trading" in Australia over the past week, you'll find in most cases they haven't fallen by the same amount as CBOT wheat, or what "published bids" are indicating.
In fact, there was a surge in demand for wheat last week with almost all grades trading, particularly in WA.
H2 wheat traded $505/t Kwinana, APW1 $475/t Kwinana, $485/t Geraldton, ASW1 was trading $480/t in Esperance and $430/t in Kwinana, while AGP1 was also trading $430/t Kwinana on Clear Grain Exchange (CGX).
Demand was also evident on the eastern seaboard with H1 trading $516/t Melbourne, APW1 $451/t Melbourne, ASW1 was $423/t Kembla, $420/t Melbourne and SFW1 traded $367/t Kembla as examples.
Barley grades were selling across the country with malt grades mostly trading for the same money as feed, though Spartacus did trade $416/t Melbourne versus feed barley at $368/t in Geelong. Feed barley was trading $350/t in WA.
Sorghum, lupins and oats were also finding homes from warehouses across Australia.
There is plenty of appetite to buy Australian grain, with 29 buyers purchasing grain through CGX last week and more searching for grain offered for sale.
Over the past decade or so, price discovery of grains in Australia has typically been defined by the "published bid" indicating the price buyers are willing to pay for grain.
There is no obligation for a buyer to provide a price if they're not interested in purchasing, nor should there be. If they do via an indicative published bid, it is likely to be low.
Growers also have a say in what price you receive. When selling grain make sure you offer it for sale at your sale price to all buyers. Let them see what grade you have, where it is, and what price you will sell it for.
Buyers can then crunch their numbers and try to buy it. This helps you create demand for your grain.
The function of a market is to determine what price it should trade. This requires sellers to offer as well as buyers to bid, not just one side of the market publishing indicative bid prices.
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