Grain Report Thursday - 02nd February
Our goal is to help growers and their agents determine the selling price for their grain by providing relevant price discovery each day. Check out the moves in overnight international markets and yesterday's actual traded prices across Australia. There's also market commentary giving context and comparisons to prices of international physical markets. If you need to change your offer price, simply edit it before market open.
What price do you want for your grain?
Look Out!
Wheat and Corn basically unchanged and Soybeans off.
Our friends in South Korea bought some more feed wheat yesterday.
They bought a small cargo of 15,000mt for April shipment which may or may not come from Australia.
The 15,000mt shipment was done at a premium to the Aussie sale of 68,000mt tonnes for June – July shipment.
However, the June shipment was sold USD $9.18 (AUD $12) lower than a sale made to South Korea last week for shipment in April – May.
WTF, the forward market falls away, whilst the grower start’s paying carry and loses the interest return on cash today! Ouch.
The market seems comfortable with the world wheat supply and that thing happening in the Black Sea seems to have fallen off the radar.
Russian Wheat falls away USD $12.50 on CME/Platts (Chicago mutual exchange) from FEB to July.
Matif Milling wheat falls away EU $14.50 per tonne March to September.
US Hard Red Winter ex US Gulf falls away USD $6 per tonne from Feb to June.
So, yes, the world market is inverted, or upside down. This hurts the Aussie farmer who carries grain into the Northern hemisphere harvest.
Why would you carry grain then? First reason, you think the market is going up. 110% of farmers think that. It’s like North Melbourne supporters who think they have a chance of making the 8 this year.
The other reason is TAX.
I often go up country and see farmers hopping out of their new Landcruiser, next to their new John Deer header, new chaser bin and new hay shed, with a look on their face as if they have just gone through 4 years of drought.
“What’s the matter Jimmy?”
“TAX, bloody TAX. We have had a ripper year and now the greedy government is going to take it all. And what’s worse is the world market is inverted. The only good thing is with Clarkson as coach, we have a good chance of making the 8.”
“Why don’t you just list it on Clear Grain Exchange for July transfer at today’s price? You can roll in into the next financial year and you offset your carry in an inverted market.”
Jimmy looked at me as if I had just given him some cheap UREA and a diesel rebate.
He said, “come on, jump in, we’re off to the pub to celebrate.”
“How far away is the pub, Jimmy?”
“Not too far Dom, just a 2 stubby trip.”
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