Buyers continue to hunt for grain
Last week 43,576t traded on Clear Grain Exchange made up of 16 grades of wheat, barley, canola and lupins across 11 port zones.
Feed barley was the dominant grade making up 32% of all trades as strong demand from the middle east and China continue to see exporters searching to get their hands on the commodity.
Public bids of feed barley kicked a little higher over the week in many areas and trades on CGX were going through a little better again. Notably the lift in Feed barley values was overflowing into malt and lower feed barley prices - although the premiums malt grades were achieving over feed is dwindling away in many areas of Australia.
At CGX we often get asked whether growers are more likely to attract a better price if they have a larger parcel on offer. The chart below shows trades on CGX last week for Feed barley at GrainCorp's Nhill site with trade size ranging from 31t to over 1,000t.
Basically if buyers want the grade at that location they will buy regardless of the parcel size. Although the more grain on offer certainly provides more opportunity for buyers to find grain that suits their buying requirements and create trade opportunities.
Hence the key message is too OFFER, regardless of your parcel size!
Wheat values also performed stronger last week considering CBOT wheat futures in A$/t were flat over the week.
ASW1, H2 and APW1 were the dominant wheat grades traded last week representing 26%, 19% and 7% of trades respectively.
11 grades of wheat traded in total indicating that there was demand for everything as buyers continually look to balance their books.
The chart below plots H2, APW1, ASW1 and AGP1 public bids (as collected by Profarmer) against trades on CGX at GrainCorp's Elmore site last week. The takeaway points include:
- There is demand for all grades - All grades of wheat were trading!
- Offering your grain creates selling opportunities - if grain was not on offer we may not have seen these values achieved with many above public bids.
- Values for lower grades are lifting relative to other grades - which often occurs post harvest.
Note SFW1 wheat was also trading at the same values as AGP1 last week, with the discount to ASW1 decreasing.
The chart below is from Profarmer's Morning Market Insights report and shows CBOT wheat futures in A$/t were relatively flat last week (grey area). A rising A$ against the US$ is not helping our grain values here! (Note Friday night saw CBOT move lower, not in the chart below)
A summary of all trades last week is provided below. Please follow the link for more detail.