Through this northern hemisphere spring period, grain markets have been adding risk premium into prices as crop conditions have deteriorated in large grain exporting countries.
Chicago Board of Trade July 2024 wheat futures reached eight-month highs mid last week, and then pulled back to end the week off the highs.
The results of the annual Kansas Wheat Quality Council's hard winter wheat tour were released at the end of last week, which corresponded with the drop in United States wheat futures.
The tour estimated an average Kansas wheat yield of 46.5 bushels per acre compared to the tour's five-year average yield of 42.4 bushels per acre, indicating Kansas crops are in reasonable shape.
The outcome of the tour projects Kansas wheat production at 290 million bushels; in comparison, the US Department of Agriculture is forecasting production at 268 million bushels, a difference of 0.6 million tonnes.
Hence the outcome wasn't overly "needle shifting", however may have provided market participants some comfort knowing crops in the major US wheat producing state look good and are near harvest.
The Kansas City Board of Trade July 2024 hard winter wheat contract fell 27 US cents a bushel after the tour yield estimate, slightly more than the CBOT soft wheat contract.
It should be noted the Kansas crop tour estimates can be quite different to the USDA's final numbers.
International traded wheat price indicators showed little reaction to the US market movements last week as reported by global independent analyst Argus.
Standard milling wheat into south east Asia quoted by Argus was up AUD $10 a tonne for the week. Spot prices for milling wheat out of the Black Sea were also reported higher through last week.
In Australia, published bids for grain generally pushed higher at the beginning of the week before retracting towards the backend reflecting the moves in US futures and a stronger Australian dollar.
Offer prices from sellers were generally not following published bids lower and as a result "actual traded" prices of grain were above published bids in many cases as buyers jumped up to buy grain.
Fifty different buyer businesses purchased grain offered by growers on Clear Grain Exchange last week with another 70 buyers searching the exchange for grain.
There were 55 different grades that traded of wheat, barley, canola, faba beans, lentils, lupins, oats, and sorghum in 16 port zones across QLD, NSW, VIC, SA, and WA on CGX.
This indicates the "breadth of demand" for Australian grain right now. Buyers are searching in all locations for all types of grain, pulses, and oilseeds.
- Details: 1800 000 410 and support@cgx.com.au
