Chicago Board of Trade wheat futures lifted 30.4 US cents a bushel or nearly 4 per cent over the week to finish at the top end of the recent sideways trading range.
Unfortunately, a stronger Australian dollar against the US dollar eroded a large chunk of the gains in CBOT when converted back to Australian values.
A 1c move in the AUD/USD exchange rate equates to about A$6 a tonne in the Aussie dollar value of CBOT wheat futures. Hence the weekly CBOT move equated to a 1.81pc increase in AUD terms.
The improvement in CBOT wheat coincided with a general increase in activity from buyers in the Australian market last week. This saw local grain prices stabilise in Australia generally.
Twenty-eight buyers bought grain through Clear Grain Exchange with more searching for grain offered for sale during the week. This represents a lift in demand side engagement from recent weeks when Australian prices were grinding lower.
End users were purchasing and searching for grain they could make work to cover further requirements, while exporters and traders were also active last week.
Although trades of warehoused grain have been relatively sporadic recently, the actual traded values continue to be better than published bids are indicating generally.
Many growers also appear to be reassessing price targets after global values have retreated recently.
In international news, the USDA updated its World Agricultural Supply and Demand report.
For the most part it was in line with expectations and so resulted in little price movement.
Global wheat production was increased to a record 779.6 million tonnes, up 7.96mt from the July estimates, primarily on the back of higher production out of Russia, China and Australia. Australia is now estimated to produce a 33mt wheat crop.
However, despite the increase in production, the world is consuming more than it's producing with global consumption estimated at 788.6mt, up 4.4mt from the July estimates.
The USDA also reduced carry-in wheat stocks from July so the net result on global end stocks for 2022/23 was a slight reduction of 0.18mt to 267.34mt.
If we take China stocks out, the reduction in end stocks was 3.02mt from July at 122.98mt. This compares with 2021/22 global end stocks excluding China of 134.59mt.
The global balance sheet remains tight, and with dry conditions persisting in Europe and the Black Sea region unstable, it feels like there's still a bit to play out in global ag markets.
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