Appetite to buy grain increases

This compares with 36 buyers purchasing grain through Clear Grain Exchange the week before, and it should be noted that more buyers were actively searching for grain offered for sale.

The demand was relatively evenly spread across the major grain growing states with 16 different buyers purchasing grain in NSW, 18 in VIC, 10 in SA, and 22 in WA.

Buyer appetite was evident across wheat, barley and canola which made up 36 per cent, 31pc, and 31pc respectively of all grain traded through the exchange with the balance being pulses and oats.

The demand was from a broad spectrum of buyers including both bulk and container exporters, domestic users stepping back in to cover requirements, and domestic and international traders.

The market evidence indicates a potential continuation of a shift in sentiment emerging which this column alluded to last week. Have prices done enough work to the downside to find demand?

Both offshore and domestic buyers have taken a relatively cautious and patient approach to buying in early 2024 which has seen grain prices erode lower.

More recently we've seen prices stabilise or improve for many grades in locations around Australia.

This appears to be driven by an improvement in buyer appetite to accumulate grain as they've lifted bids to match grower offer prices on grain they've been interested in and monitoring for some time.

The northern hemisphere is where most of the world's crops are grown, and the northern hemisphere spring is when the size of those crops are determined.

Winter wheat crops are only just emerging from dormancy and spring crops are still to be planted.

Available global wheat stocks (stocks-to-use) according to the United States Department of Agriculture are expected to reduce in 2024/25.

Global corn stocks-to-use are expected to increase, with a large amount of this expectation based on a large corn crop in the United States, which has not yet been planted.

The market is now tuning in to weather forecasts and crop condition reports out of the major northern hemisphere crop producing regions as they enter their spring.

Conflict also remains in some areas of the world which has the potential to disrupt supply.

There has been a lot of risk premium taken out of grain prices with plenty of uncertainty remaining over the size of this year's crops.

Perhaps that is being viewed as a buying opportunity by some participants.