Prices for many grades of grain stabilised or improved across Australia last week.
It was a notable shift from recent downward trends and enabled grain markets to trade as buyers stepped in to get hold of grain.
Thirty six buyers purchased 39 grades of wheat, barley, canola, faba beans, lentils, and oats from 172 sellers in 14 port zones across Australia through Clear Grain Exchange.
There was a relatively even spread of traded volume across wheat, barley, and canola grades making up 36 per cent, 36pc and 27pc of total volume respectively.
It leads to the question most growers want the answer to.
Have prices done enough work to the downside to find demand?
If the answer is yes, it may provide some stability in prices.
A bearish market sentiment can at times be self-fulfilling.
Buyers remain cautious and patient to purchase grain because prices are declining, and they may be able to buy grain at a lower price.
We've seen this behaviour recently with both offshore and Australian based buyers less active.
Reports the Chinese cancelled some cargoes of wheat has added to this narrative.
Speculators holding record net short positions in US corn, soybeans, and high protein spring wheat, where they benefit from prices going lower, supports the bearish sentiment.
On the flipside, grain still needs to be consumed for the world to eat which means demand builds as time progresses and buyers stand aside without significant trade activity.
One analyst reported that Australian grain exporters had begun to move some tonnes in the last month, implying export sales were being made.
World wheat consumption will reach new record levels this year, which is 16 million tonnes above last year according to the United States Department of Agriculture (USDA).
Northern hemisphere winter crops are just starting to emerge from dormancy and spring crops such as high protein spring wheat, corn, soybeans, barley, and other pulses are still to be planted.
Reports on crop conditions in major grain producing regions of the northern hemisphere are starting to filter through as they approach their critical grain growing months through spring.
French crop conditions were reported at the lowest levels in four years for this time of year.
Market participants will monitor these reports closely given a lot of risk premium has already been eroded from global grain prices on expectations of large crops.
Have prices fallen enough to find demand?
We would love to know.
What we do know is growers can create demand by offering their grain for sale to all buyers at the price they want.
For more information or to see what values are trading contact Clear Grain Exchange on 1800 000 410 or support@cgx.com.au