Grain Report Thursday - 29th 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?
Markets up last night.
Corn and beans are a lot firmer on the back of demand optimism, China covid restrictions easing and production pessimism, Argie dryness.
The Gypos bought 200,000 tonnes of Russian wheat at $339 Cost and Freight (C&F) for February shipment.
At the same time, ship insurers are withdrawing War Risk Cover for vessels exporting from Russia, Ukraine, and Belarus, which adds another level of execution risk out of the Black Sea.
If you were a ship owner, would you risk a USD $20 million vessel in a war zone?
The Gypo business works back to Russian wheat at around USD $300 FOB – USD $305 FOB, their ports.
This should be the bottom of the market for ASW wheat, which is equivalent to FIS WA AUD $420 level and AUD $400 Track East Coast.
US corn is trading at USD $320 FOB level, which is firmer than Russian wheat and we are seeing Asian buyers removing a percentage of corn from their rations and replacing it with Australian wheat.
So, corn also puts a floor in the wheat market.
ASW Wheat is trading around AUD $340 FIS Kwinana, which is USD $250 FOB equivalent. Typically, Russian wheat is the cheapest wheat in the world, which is trading around USD $300 FOB.
On the East Coast, ASW is currently trading around AUD $385 to AUD $390 Track, or around USD $295 FOB which is around the bottom; so unless Russian values soften or corn falls away, there is no reason for this market to go lower.
I cannot see world values falling away, due to Argie production concerns. World wheat values also tend to firm this time of year due to supply chain disruption due to snow, and major exporter stocks start to tighten in the back end of their marketing year.
Also, the shipping stems are as full as Kevin Rudd’s wallet, so the buyers need your grain; take some control and don't give your grain away.
Most importantly we're always here to help!
Please give us a call or email if you have any questions.
Call 1800 000 410 or Email support@cgx.com.au
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