Canberra – December 23, 2020
“Australian grain values have been the cheapest worldwide for some months, because many growers have been comfortable sellers at values bid to them” a trader said.
He said many farmers had experienced the pleasant problem of crop yields exceeding pre-harvest assessments, and as such, given prices were above long term decile 5 levels, they had made the decision to sell immediately.
He said he felt Australian wheat was too cheap, even allowing for the need to win market share internationally.
“Australian grain does not need to be $20-30/t cheaper than its nearest competitor to win offshore demand, which has been the case into many markets in recent months”
Tom Guthrie, national business development manager with CGX, said east coast grain in particular presented opportunities.
He said in recent weeks buyers had started to recognise the value in grain at current prices and were looking to start owning the crop in spite of the fact export slots are hard to come by.
“There has been a bit of a shift in the dynamic, which reflects the opportunities that will appear,” he said.
Mr Guthrie said Australian wheat and barley was far and away the cheapest option on a free on board (FOB) basis in US dollar terms to a range of markets, not only including our freight advantaged neighbours in south-east Asia but into the Red and Arabian Seas.
“Western Australian prices are very competitive, but east coast values are cheaper again,” Mr Guthrie said.
Many growers wanting to sell grain quickly have been hammering values lower as they are effectively paying grain buyers to carry their grain for them into months when it can be shipped, plus some,” he said.
