Clear Grain Exchange looks at grain pricing

This is being driven by local supply and demand, not the price of grain in international markets.

Russian grain continues to be referenced as the cheapest origin of grain and therefore is setting global prices.

At time of writing, Russian feed wheat was reportedly indicated about US$300/t free on board (FoB) ex their ports which works back to about $410/t WA FIS and $390/t track Eastern States.

Russian feed barley was indicated US$290/t FoB which equates to about $390/t FIS WA and $370/t track east coast.

Last week Pakistan purchased 450,000t of Russian wheat in a tender for US$372/t delivered to Karachi.

This works back to about $480/t FIS Kwinana for an ASW1 equivalent quality.

Note Pakistan paid the same price, US$372/t delivered to Karachi, at the start of November.

If we use this as a pricing point, the global market has roughly stayed the same over the past month, yet the Australian market has fallen significantly lower.

A strengthening Australian dollar has reduced Australian values by about $35/t over the same period.

Yet Australian grain values have fallen by more than that.

The Pakistan tender result at the start of November indicated Australian grain was cheap, and last week's tender result indicates Australian grain has got even cheaper.

Australia is likely to be supplying Thailand and they also bought more feed wheat last week at prices equivalent to about $440/t FIS WA and $420/t track Eastern States.

Granted exporters are facing higher supply chain costs than normal.

READ MORE GRAIN NEWS:

Costs incurred by shipping demurrage and other delays need to come out of the aforementioned converted prices.

Regardless, the point is Australian grain prices do not need to fall to be export competitive.

In fact, there is room for upside.

Don't add to the harvest pressure on prices.

If more growers were offering grain for sale at higher prices, grain would likely be trading at better prices.

A buyer will not push prices higher than where a grower is willing to sell to them.

Nor should they.

That's how a market works.

Growers should realise that selling into cash or contract bids as trucks deliver grain will weigh on prices.

This is the traditional "harvest pressure on prices".

If growers are able to slow down their sales pace and offer their grain for sale at a price they deem is fair value, there is likely to be better value for your grain.