![Factors that move the grain markets Factors that move the grain markets](/images/transform/v1/crop/frm/gCii2676WpkhR8KAvZ8bkq/29e636cb-d4cb-4a69-bd6c-1553c7b51ce4.jpg/r17_0_4270_2392_w1200_h678_fmax.jpg)
INTERNATIONAL wheat futures pushed higher at the start of last week and then retracted, with European and US wheat futures ending the week lower.
Strength in prices at the start of the week was fuelled by reports confirming poor conditions through the US winter wheat areas, Russia blocking vessel inspections out of the Ukraine and news some European Union countries decided to stop Ukraine imports because this was reducing their domestic values.
The weakness in prices later in the week was driven by reports of good crop conditions out of the EU, confirmation that EU countries will allow the flow of Ukrainian grain through their countries to other importers and a lack of new bullish weather news from anywhere else.
Weaker macro markets and falling crude oil prices due to uncertain global economic conditions also appear to be flowing through to grains.
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Fund managers, or speculators, maintain a large net sold position in Chicago Board of Trade (CBOT) wheat, meaning they're comfortable betting on the market to fall as explained in this column a few weeks ago.
Hence it feels like the market needs some new bullish news to push the market higher.
There are plenty of potential areas this may come from during the Northern Hemisphere spring.
But there is no certainty it will happen.
In terms of global sales of physical wheat for price discovery, the Philippines reportedly purchased 60,000 tonnes of feed wheat at US$297/t C&F (cost and freight or delivered their port) for July shipment.
This works back to about A$377/t FIS WA or A$350/t track eastern Australia on the back of an envelope with minimal supply chain slippage costs.
South Korea reportedly purchased 50,000t of Australian wheat, including ASW1, ASW9 and H2 grades - presumably from WA given the ASW9 grade.
In WA Free Into Store terms, the South Korean purchase equates to about A$405/t for ASW1, $425/t for ASW9 and $455/t for H2 respectively.
Japan also purchased 30,000t of ASW1 Australian wheat.
Australian grain remains in demand, although evidence suggests the differential between export prices and Australian domestic prices has closed.
Australian exporters are still able to move grain offshore, but require the right grade in the right location and efficient execution - meaning minimal extra costs incurred through the supply chain.
This is more reason for growers to offer their grain at the price they're targeting.
Show buyers where your grain is, what quality it is and - importantly - the price you're a seller at.
This helps buyers do their job and find homes for your grain, which is a good thing for the industry.
For more information or to see what values are trading contact Clear Grain Exchange on 1800 000 410 or support@cgx.com.au