AUSTRALIAN farmers are looking at the rare combination of solid yields and good prices, with wheat prices currently sitting above $300 a tonne in all port zones.
In contrast to high prices over the past two years, spurred on by a red-hot drought influenced domestic market, this year international values are the major driver of price gains.
Malcolm Bartholomaeus, Bartholomaeus Consulting, said in US dollar terms, Chicago Board of Trade futures were at a five year high.
In Australian dollar terms, excluding the currency-induced rally in February / March this year when the Aussie dollar collapsed on the back of the onset of COVID-19, the prices are also at historic highs.
He said the US rally had been generated primarily by the US Department of Agriculture (USDA) issuing a report with markedly lower than expected US stocks.
This, combined with emerging problems with the winter crop plant due to dryness in both Russia and Ukraine and in key wheat producing parts of the US such as the southern plains, has led to investors driving the wheat price higher.
In terms of new crop wheat prices locally, values have been above $300/t for over 10 trading days, after Chicago futures hit US587.4 cents a bushel at their peak.
Mr Bartholomaeus said with wheat yields relatively assured in many parts of Australia's cropping zone, farmers were taking the chance to lock in some good prices.
"They will look to get as much in place as they feel comfortable with leading into harvest," he said.
Mr Bartholomaeus said history suggested there was unlikely to be much further upside in the market.
"Rather than expecting the market to go higher, it is probably more to the point to see if the market can retain its current value," he said.
If it was to go higher, he said there would need to be more inclement weather influencing the winter wheat plant.
Tobin Gorey, commodities analyst with Commonwealth Bank, said there had been a good lift in wheat, especially once broader market concern about the health of Donald Trump lifted.
However, he said cash prices had not risen by as much as futures values.
Another possible boost for grain values could come with increased demand.
Mr Bartholomaeus said the world was closely watching Chinese buying patterns.
"China is behaving a little strangely with its grain buying patterns, it has bought its biggest amount of wheat since 1995 and is certainly importing corn and soybeans in large volumes," he said.
"There is some speculation damage to grain storages in floods earlier in the year may be worse than first thought leading to a need to buy more grain, which is supportive of world values."