Chicago Board of Trade wheat in the red again

Russia is pushing grain out the door at a rapid pace with five million tonnes expected to be exported in November, compared to 3mt in November last year.

The Australian harvest is also underway and while it is facing significant disruptions, the market seems to be focused on the reality that the crop will be big and grain continues to be exported in big volumes.

This saw Chicago Board of Trade wheat finish the week in the red for the eighth consecutive week, falling another $6.50 a tonne in Australian dollar terms.

International grain values have also drifted lower and a rising Australian dollar is taking more value out of Australian prices.

Despite the trend lower in global grain prices, Australian grain does not need to get cheaper to remain competitive into international markets.

As an example, Egypt bought another 175,000t of wheat last week from Russia and Ukraine for US$361/t delivered to their ports (carry and freight (C&F)).

If we convert this transaction back to Australian values, it equates to $460/t FIS in Western Australia and $430/t track port in the Eastern States for ASW1 quality wheat.

Iraq reportedly purchased 200,000t of Australian wheat and 100,000t of Canadian wheat as it looked to secure some quality, however no price was reported.

Thailand bought 60,000t of feed wheat for US$345/t delivered to its ports (C&F) which equates to about $440/t FIS in Western Australia.

These prices are consistent with APW1 wheat reportedly offered out of WA at US$369/t free on board which equates to $516/t FIS to WA or $487/t track port to Eastern Australia.

Hence while global values may be weakening, Australian prices do not need to weaken to remain internationally competitive - in fact, there is room for upside.

How growers sell their grain this harvest will impact the prices they receive.

Selling into cash bids as trucks deliver grain can push prices lower given buyers can be patient accumulating grain.

The quicker growers sell into cash bids, the more downward pressure there is on prices, it's as simple as that.

For growers who are harvesting and delivering grain into a warehouse, you can offer grain for sale at a price rather than accepting the bids on cash boards.

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A lot of grain still needs to be bought for export and domestic use which means there is demand for your grain and it will trade at a price.

If growers are able to slow down their sales pace and efficiently send their price signal to all buyers, there is likely to be better value for your grain.