PUBLISHED bids of APW1 (wheat) in the Esperance port zone have consistently been higher than those in Kwinana since the start of March, however actual traded values in Esperance were much higher than published bids earlier than that.
Wheat from the Kwinana port zone is regularly bid at a small premium to Esperance, reflecting the slightly higher execution costs from Esperance to major export destinations.
However, this can vary considerably based on supply and demand factors such as the quality profile and size of the crop harvested, grower selling, buyer appetite and risk of executing.
Clear Grain Exchange (CGX) business development manager Peter Brennan said WA grain had been pricing very competitively into export destinations for months.
"With the recent jump in international wheat markets on the back of supply concerns due to the Ukrainian/Russian war, the world needs WA wheat even more," Mr Brennan said.
"Given the national supply chain tightness and the quality profile of last season's wheat crop is now known, buyers appear keen to be searching for grain in port zones where shipping capacity is available and where grades are available that they can make work."
The recent addition of 200,000 tonnes in shipping capacity from CBH Group undoubtedly had an impact on the prices being fetched.
Extra shipping capacity creates more demand for grain because more can be moved offshore and importers are needing it.
"We have seen this flow through to buyers searching for almost all grades as they work out what's available versus what they can blend on the ship to make work," Mr Brennan said.
"Thankfully this has helped to underpin prices with many buyers pushing prices up to values growers are targeting for sales so they can secure the grain."
Overall, there have been periods this season where Esperance port zone wheat values, ASW1 in particular, have been trading on CGX higher than Kwinana port zone, even before the most recent shipping capacity increase.
"Helping more buyers participate in the market has meant the price differential for some grades has better reflected the real value of grain across port zones," Mr Brennan said.
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