A few questions/points to note about current markets as we edge closer to harvest. Aussie basis is at historic highs for this time of the year. How much higher can it go, or will it fall away? This will be dependent on a number of factors. If futures fall further, if sellers emerge from southern NSW and Vic. Grain was bought around from SA in 13/14 season and will do so again if prices climb much higher in NNSW/SQ. These growers are largely export sellers and this is a very real threat to prices in the north come harvest.  If we receive two inches of rain in NNSW there will be a large area of sorghum planted. Whilst this won’t create an influx of grain immediately, we could be staring at a massive sorghum crop in early next year.

Will I receive a premium for protein this year and how much? World protein premiums are currently about $90-100/mt above APW. You may be thinking why aren’t we getting this over APW here. The reason is because our basis is already so strong (Ntl zone $80-85/mt and BNE up to $100/mt) so a $15-20/mt premium for APH on a multigrade contract is above where APH would actually be competitive in world consumptive markets. Domestic consumption in NSW of APH is around 80-100k/mt, and H2 around 1 million mt. Canada have a 10 million tonne carryover of high protein wheat. They can execute into world markets at $30/mt below where our prices are currently.

For anyone still holding old crop grain, we encourage you to look at the inverse in the market for new crop. Wheat at $20/mt, barley around $16/mt and even old crop sorghum is demanding a $25/mt premium over new crop. The only exception is chickpeas, but risky to sell old crop against new crop as buyers will be looking closely at quality, in particular, colour.