Australian grain prices trading through Clear Grain Exchange remained supported last week despite Chicago Board of Trade wheat futures declining AUD$11 a tonne.
CBOT wheat continues to be weighed down by expectations of a large United States corn crop which was largely verified by the annual ProFarmer crop tour through the US Midwest last week.
US corn plantings are large, and the crop tour estimated US corn yields to be largely in line to slightly below current market expectations as the corn crop nears final maturity before harvest.
International wheat markets on the other hand continue to juggle a number of factors that are keeping international buyers on their toes, and Australian grain in demand.
US spring wheat conditions are declining and remain well below the 10-year average, the Canadian crop is getting smaller, there is daily news out of the Black Sea regarding further damage to grain infrastructure and talk of floor prices for Russian wheat, the Australian and now Argentina crops are at risk of shrinking further, and India could be importing wheat this year.
You can understand why international wheat buyers may want some cover on safe, quality wheat from Australia.
China is now back in the Australian market for barley. That means there is potential for barley to take Australian export capacity away from wheat, and other commodities for that matter.
Traditionally the second half of the calendar year would see international demand swing towards the northern hemisphere with less demand for Australian grains.
This year, however, the second half of the calendar year appears to have a full export pipeline for Australian grain.
The heightened demand for exports of Australian grain puts more pressure on domestic buyers to ensure they can accumulate their requirements, particularly with production in many areas of Australia having the potential to go backwards without significant rain in the next month.
Queensland has been trading a drought market for months at prices that have made it possible for grain to come around from WA.
For pricing context, depending on the source, APW1 wheat out of WA and SA is quoted between USD$295 and USD$315/t Free on Board.
USD$300/t FOB ex-WA converts back to about AUD$430/t FIS WA and AUD$410/t track port eastern Australia without supply chain slippage costs.
It all adds up to robust demand for Australian grain. Offer grain for sale at your price to determine its full value rather than relying on published bids for your price discovery.
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