Grain Report Wednesday - 11th January
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?
Overseas markets continue to fall overnight.
I think we need to take a breath and restart 2023.
India has come out with the early crow and forecast their crop to be a record 112 million tonnes, up 5 from last year.
“Get it India”
The current wheat crop production for the previous crop, harvested in March – May this year, is also a little bit rubbery. India says it was ~107 million tonnes. The USDA called it 100 million tonnes and the trade is calling it sub 100 million tonnes.
The plumber who lives next door to me said it doesn’t add up. In mid-December, Indian wheat stocks fell to a 6 year low of 19 million tonnes versus 37.85 million tonnes the same time in Dec 2021.
That’s a drop of 20 million tonnes. So, they produced almost a record crop, they exported 4-5 million tonnes, before the desk jockeys realised their crop was knackered and under 100 million tonnes; that’s when the Swan Hill Institute of Technology hit the fan.
World prices as well as Indian domestic wheat prices skyrocketed; delivered ASW Melbourne wheat went over $500, and CME went to 1277 cents per bushel. “Good God blime me.”
India has a food inflation problem, so of course they are going to say, “all is good, nothing to see here, big crop and our cricket team is the best in the world”.
Gee, I hope it’s not too hot between Feb and March again!
In other news, the Gypos bought 120,000 mt of Russian wheat at $337 C&F (Cost $ Freight).
This business is USD $2 per tonne lower than last tender on 29th of December, less than 2 weeks ago.
So, the sky is falling on our heads as “world markets” fall with big supplies from Russia, Australia, and Canada. Sell, Sell, Sell!
Let’s all run to one side of the boat until we tip it over?
But hang on, the bottom of the market has only dropped USD $2 pmt (per metric tonne) – so effectively nothing?
The freight from Russia to Med Sea Egypt is around $20 pmt, which puts the bottom of the market at $317 FOB (Free On Board) Russia. There are obvious other costs executing from Russia (insurance), but that doesn’t change the price to buyers, as we compete on a delivered basis to world markets.
The world market bottom is USD $317 FOB, or $430 FIS (Free In Store) WA and $410 Track Vic for ASW wheat.
Australia doesn’t sell to the Egyptian government anymore as we have higher paying markets closer to our shores.
Australia and Russia have big crops with export surpluses, but we also have supply chain inefficiencies, so we can’t export it all.
Most importantly we're always here to help!
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Call 1800 000 410 or Email support@cgx.com.au
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