NOODLE wheat hit a record $500 a tonne last week.
The short supply of WA Noodle wheat initiated the price rise with prices expected to hover at these levels over the coming weeks.
As the only State in Australia capable of producing ANW1 the current prices also reflect WA's inability to provide around 800,000 tonnes of Noodle wheat which is the current market demand each year.
Most of the tonnage is usually purchased by Japanese buyers for the Udon Noodle market.
Last week the top bid for Noodle wheat was $60 higher than ever seen before and Emerald's WA general manager Rob Proud said the price hike was a classic reflection of the new deregulated market.
"The price hike is purely driven by a shortfall in overall supply," he said.
"Noodle production will more than likely fall between 380,000t and 450,000t, which is well short of the minimum 800,000t required.
"This total demand may vary slightly as export destinations ponder the blend volumes and quality for this year's sales and shipments.
"This season's prices for Noodle wheat, or premium over APW, are likely to stay for some time at least until further pricing occurs into Japan and Korea."
Mr Proud said the realisation of values in forthcoming sales and tenders would set the tone for pricing Noodle wheat for the coming months.
He also said there was competition for owning Noodle wheat and many buyers were looking to take positions to buy Noodle wheat for forthcoming sales or to possibly fill existing sales.
"These are great prices for Noodle wheat growers, brought on by falling planted hectares and obviously poor yield," Mr Proud said.
"We are encouraging growers to continue with growing Noodle wheat but we don't want to over-saturate the market as premiums will suffer as experienced in previous years.
"At this stage it's difficult to see the current premiums remaining for next year although there is some premium for Noodle wheat over APW for next season already."
CBH Grain's head of marketing Tom Puddy agreed with Mr Proud and said WA growers were enjoying the upside of the Noodle market but warned that one day a "breaking point" would be inevitable.
Behind the scenes the CBH Grains' technical team was working with overseas milling companies to work out a sustainable ratio for importing the Noodle varieties into Japan and South Korea.
"For us it's not about making cut-throat decisions and making instant money," he said.
"We want to maintain our key markets well after this price hike has disappeared."
Mr Puddy said the Japanese supply from WA was regulated by its import market, unlike South Korea's privatised model which was driven by the economy and was much more price conscious by comparison.
"We're trying to smooth out the price bump as much as we possibly can so our Japanese and South Korean markets never have to seek an alternative supply," he said.
"By comparison our Japanese counterparts are more used to a particular quality of Noodle wheat that's only produced in WA and we're working very hard to keep them coming back to WA."
Jerramungup farmer Graham McKinlay was also very impressed by the current Noodle wheat prices but was also thinking like the traders.
"Calingiri was always a good performer in this area so with prices like this it'll be interesting to see how many people steer away from the Yitpi they used to originally replace Calingiri and jump back into growing it," he said.
"As long as it doesn't flood the market like we've seen before."
Burracoppin farmer Chris Barnett said the $500 price premium for Noodle wheat was a good incentive to keep growing Calingiri wheat.
The Barnett's grew about 2050 hectares of the variety this year after planting it for the last 10 years.
"We'll be growing it again next year if all goes well," he said. "We're about a week away from wrapping up our harvest for this season so the price hike will definitely help us out."
Chris shared the same concern as Mr McKinlay and said the price increase would inevitably encourage more farmers to grow Noodle varieties if it was to remain at such a high level for any extended period of time.
"I guess we'll have to see what happens," Chris said.
"But for now we couldn't be happier with the price that we'll be getting especially after a lot of growers suffered through a pretty terrible season."
A range of commodities gained ground last week against improved manufacturing data from China and while the wet weather throughout South Australia, Victoria, NSW and Queensland wasn't helpful, it did put a squeeze on the market and also contributed significantly to the price shift.
Prices for Australian high protein wheats were getting very high relative to other high protein wheats in the global market.
Malting barley prices were also moving up and continued to maintain a healthy premium to wheat prices and very strong premiums to feed barley.
A number of marketers said the opportunity was to sell any stocks of malting barley into the rising market because there would also be a limit to how high prices would be able to go before they were simply too high.
They also said demand would probably remain strong while there were supplies of barley still to be purchased.
Malt barley could still be harvested from crops in South Australia north of Adelaide, on the York and Eyre Peninsulas and then in the late regions in the south east of South Australia and western Victoria.
Marketers said once headers roll again in the Eastern States farmers will become very active sellers, particularly in the beginning to get some cash flow.
They also said the trade would be willing buyers for a while but they wouldn't hold on to extreme prices if new supplies became available.
WA high protein wheat prices also looked cheap relative to Victorian and NSW prices.
