INTERNATIONAL wheat futures ground lower through last week, with the Chicago Board of Trade (CBOT) December 2023 (Dec23) wheat contract losing US35 cents per bushel.
CBOT Dec23 delivery wheat contracts are reflective of US new crop markets, and many participants think supply will be more abundant by the time harvest comes around.
There were some exaggerated moves in nearby May delivery contracts in both CBOT soft red winter and Kansas City board of trade hard red winter wheat contracts.
This was related to positioning by traders as they sell or buy back their positions in the May contract ahead of the end of the month - and before it reaches expiry.
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Our upcoming local harvest aligns with either December or March delivery contracts.
So, the wild swings in the May contract are likely to have little consequence to us.
As has been noted in recent articles, and commented on by market analysts, there remains some significant risks associated with the world supply of wheat in the coming year.
It appears at this stage that many market participants are comfortable anticipating an increase in world production, with prices falling as a result.
This view was reinforced this past week with important rains falling on US crops and abundant planting expectations reported in Europe and Canada.
The relatively muted-to-lower price trend may continue for some time if weather conditions improve in the key growing regions across the world.
On the flip side, given relatively tight world balance sheets across grains and the ongoing Black Sea uncertainty, if weather forecasts turn less favourable it could see markets react to the upside.
So, we watch the weather forecasts along with everyone else participating in the global grain market.
Weather will determine global supply, which will be a large determinant on prices Australian growers receive in the year ahead.
The Australian grain market was more exciting last week with bid, offer and trade activity across all States and grades.
There remains a high level of interest for grain offered for sale that works for individual buyers.
Opportunities for Australian buyers to trade profitably are somewhat harder to come by, but are available when they can see the grain and execute through the supply chain efficiently.
Right time, right place and your grain offered for sale may get hit.
You just have to have it out there.
While growers are busily managing their planting programs, there remains opportunity for them to price grain for sale.
For more information or to see what values are trading contact Clear Grain Exchange on 1800 000 410 or support@cgx.com.au
