OVER the past two weeks, this column has tried to outline global wheat fundamentals based on the most recent United States Department of Agriculture (USDA) World Agricultural Supply and Demand Estimates (WASDE).
Global wheat stocks-to-use are projected to be tight and as such should support wheat prices, particularly with poor US winter wheat conditions and supply uncertainty from the Black Sea.
The drag on wheat prices has been favourable crop conditions through Canada and the European Union, and the USDA expecting a significant replenishing of corn stocks, a substitute for wheat into feed demand.
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At current projections, the USDA is expecting US corn production to lift 39 million tonnes or 11.2 per cent from the year prior.
It would be the largest US corn crop ever and is 7.7pc above the five-year average according to USDA numbers.
US corn was estimated at 81pc planted by the USDA as at May 23 and so has some way to go to realise the big crop being projected.
Historically strong corn prices and fertiliser prices falling from their highs ahead of northern hemisphere spring plantings is helping to motivate growers to plant the crop the USDA projects.
However, in the last week, Chicago Board of Trade (CBoT) corn futures rallied to one-month highs on reports of dryness through large areas of the US corn belt and forecasts for further dry conditions.
Just as corn prices have been pulling wheat lower, they can also push wheat prices the other way.
This appears to be the main driver of CBoT wheat futures firming a little this past week.
There is someway to go before the US corn crop is harvested in September and October.
In Australia there has been a significant uplift in buyer appetite for grain in recent weeks.
Uncertainty over the Australian crop, Australian grain remaining in demand globally as a consistent supplier, and some freeing up of the container market are potentially all contributing.
Growers have also been relatively patient sellers since earlier in the year.
This has seen growers holding their prices at levels they feel is fair rather than chasing the market lower.
Whatever the reasons, the improvement in local demand for Australian grain has seen buyers push bids up to reach many grower price targets in recent weeks.
Thirty eight different buyer businesses purchased 200,000 tonnes of wheat, barley, canola, sorghum, lupins and faba beans across Western Australia, South Australia, Victoria, New South Wales and Queensland on Clear Grain Exchange last week.
More buyers were searching and bidding on grain offered 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
