CBOT wheat market sets tone for Australian buyers taking a cautious approach

Restricted supply from the Black Sea and poor crop conditions in North America and Europe have been known, monitored, and priced in by the market for some time.

The most recent information was the United States Department of Agriculture confirming tighter global and US ending stocks in their recent World Agricultural Supply and Demand Estimates report, and the Indian wheat export ban.

Both saw the Chicago Board of Trade wheat market react by surging higher.

Last week CBOT wheat ground lower for most of the week as rain appeared on forecasts through the US, and the full details of the Indian export ban revealed "some" grain will continue to move.

By the end of the week, some buying kicked in again to keep CBOT wheat trading just above technical support levels.

The weaker CBOT wheat market set the tone for Australian buyers taking a more cautious approach.

Rather than continuing to chase the market higher to secure tonnes, buyers were more selective on parcels and careful with price expectations.

On the offer side of the Australian market, growers were generally holding their offer prices on grain listed for sale.

Many growers and grower agents were also offering their grain for sale at recent traded prices, noting that they feel Australian grain remains competitive internationally at the price they're asking.

Some Australian Premium White 1 wheat in Port Adelaide managed to trade at $562 a tonne port equivalent price late in the week.

Hence, Australian wheat values have not reflected the recent losses in CBOT wheat, just as they didn't reflect the full upside when CBOT wheat was surging.

However, demand has cooled, and prices have slid lower from the highs made recently for the moment at least.

Where it goes from here is anyone's guess.

In other commodities, warehoused feed barley was trading at $455/t Port Adelaide, $440/t Kwinana, $447/t Geelong and $453/t Newcastle.

Malt grades that traded were attracting better values.

Canola traded $1116/t in Port Adelaide plus oil bonifications and $1068/t in Melbourne.

For growers considering making sales, demand for warehoused grain can be difficult to predict so make sure you engage all buyers with an offer price.

For those who have finished selling old crop and looking at new crop sales, be sure to consider the most appropriate method to sell.

Australian grain remains competitive into international markets and in an enviable position to supply the world, but this won't last forever.

Everyone is trying to work out how long it will last.