WITH COVID-19 causing instability around the world, the stock market is crashing, but the price being fetched for Western Australian grain is booming.
Grain demand lifted considerably last week, with Thursday and Friday seeing prices pushing up, particularly for wheat and barley.
Feed barley was trading at about $275 per tonne in the Kwinana Port zone early last week, but by Friday it had reached $305/t, meanwhile wheat was also back to previous highs and was sitting at $380/t.
Clear Grain Exchange managing director Nathan Cattle said there was a lot of demand for grain and while he could guess at what's driving that, the point is a lot of growers have been taking advantage of the prices.
"We're in uncharted territory, but for the grower there is strong demand for their grain now and who knows how long it's going to run hot," Mr Cattle said.
"It does look like it's flowed on from last week and as a result, a lot of growers are meeting their price targets.
"We've seen buyers' bids come up to match a lot of prices that the growers are after and we're seeing a lot of trade activity as a result."
A weaker Australian dollar seems to be helping because there has been a lot of demand coming from international buyers, which is pulling the bids higher from domestic buyers.
Mr Cattle said $275/t for feed barley at the beginning of last week was a good price at the time.
"It surged $30/t higher in three days and there was still strong demand on Monday to start the week," he said.
"Malt barley was also achieving a small premium over feed, so that suggests there are still active malt buyers otherwise it would all be trading at feed prices.
"There is strong demand now and a lot of growers have been taking advantage of that demand and achieving prices for their grain at the highs we saw for this harvest."
The prices being fetched seem to mirror the response of Rabobanks latest quarterly Rural Confidence Survey, in which about one third of WA's farmers had an optimistic outlook on the year ahead.
According to the survey, commodity prices was the driving factor for that confidence for 47 per cent of growers, which is up from 39pc from last quarter's reading.
Rabobank regional manager for WA Steve Kelly said confidence was up strongly in all commodity sectors, particularly among grain growers, with this optimism reflected across all surveyed regions in the State.
"After last season's disappointing finish, with only two thirds of WA's average crop produced, the potential prospect of a better season and strong commodity prices has farmers buoyed," Mr Kelly said.
"From a global perspective, the low Australian dollar was providing optimism in the cropping sector, thanks to the opportunity to potentially boost export markets for local grain.
"However, as an export-market-dominated State, the coronavirus was creating angst amongst some producers."