Harvest pressure on grain prices appears to be occurring again.
Cash prices for some grades at delivery sites where harvest is progressing have fallen more than $10-$20 per tonne within a week, or a day in some extreme cases.
Reports indicate grain is being sold into cash bids advertised as it is being delivered.
This is putting downward pressure on Australian grain prices.
There is little incentive for a grain buyer to be aggressive on their bid given growers are currently selling and may well sell at lower prices.
The take-away here is "growers may well sell at lower prices".
Another way to think about this is Australian growers have a say in the price of grain.
As we reported in last week's article, prices of international grain and recent sales from Australia indicate Australian grain remains competitive into international markets.
This means grain prices to Australian growers do not need to go lower to win export business out of WA, South Australia and Victoria - and dryer areas in the north east should maintain values above the southern States.
International buyers are also watching how Australian growers sell, and if they see Australian growers selling into lower and lower bid prices, they may try to pull their prices back.
How Australian growers sell their grain is likely to be the biggest factor to impact grain prices in the next month.
If growers sell a lot of grain into published cash bids quickly, it will push prices lower.
The alternative is growers can 'offer' grain for sale at a price.
They can show the Australian grain industry the offer side of the market, rather than simply relying on 'bids' to determine what their grain is worth.
Often grain will 'trade' at higher price levels than published bids indicate.
Some growers that are on the header harvesting are offering grain for sale on Clear Grain Exchange for delivery in a future month such as November, December, or January.
This means they can offer the tonnage they choose at a price they're comfortable with to as many buyers as possible when they're not in the heat of day-to-day harvest operations.
Growers that are not yet harvesting are also able to start offering grain for sale into these future months which gives their price target time in the market to generate demand.
Remember there are plenty of buyers that want your grain.
Try and give yourself some time with your grain selling and help avoid downward harvest pressure on prices.
For more information or to see what values are trading contact Clear Grain Exchange on 1800 000 410 or support@cgx.com.au
