Grain Report Thursday - 15th December
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?
Wheat and corn off last night. Beans up slightly.
The ASX Jan wheat contract was off $8 yesterday settling at $390.
The AUD is up again and getting close to 69 cents.
I am not sure why we are giving our barley away, with EU exports at 2.76 million mt or down 41% on last year.
EU barley imports are also up, along with corn due to their drought this year.
In the world market, Russia, Ukraine, EU, Canada, and Australia make up the major barley suppliers to the world.
Ukraine has a few issues. The EU is coming off a drought, with less corn and increased barley domestic demand, which is reducing exports.
Canada, Russia and Australia have good crops, but I think barley will be a lot tighter in 2023 with EU exports falling away.
World barley prices are around USD $280 ex Russia, which is equivalent to East Coast Track AUD $360 and FIS (Free Into Store) WA $370.
Current bids are around AUD $305 Track VIC and AUD $290 FIS WA.
So VIC Track is AUD $55 under export parity and WA FIS is AUD $80 under export parity.
The issue in WA is the exporting margins on canola and ASW wheat are greater than feed barley.
We saw feed wheat trade into the Philippines last week at an equivalent AUD $436 FIS WA / Track Vic AUD $412.
In WA, to load a vessel with ASW against this sale of feed wheat the difference between FIS and export parity is close to AUD $100 pmt (per metric tonne), whereas the feed barley gap between export parity and site prices is AUD $80 pmt.
One would expect ASW to be worth more than feed wheat on the world market, so the margin to sell and ship ASW is more attractive.
On the East Coast, the difference is around AUD $60 per tonne for ASW, so feed barley and ASW will compete for shipping slots.
The APW export parity difference from the track market is also around AUD $50-$60 pmt.
If only we had more export capacity to maximise returns to the Australian grower.
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