The following graph shows the movement in Chicago (CBOT) December 2016 Wheat Futures price and the 2016/17 APW Multigrade price delivered port.
Both the CBOT Futures Price and the APW Multigrade price have declined steadily since January. The basis has also fallen away since December/January, resulting in a drop in the old-crop domestic price in the order of $40/tonne since late 2015.
Given high world stocks, a significant increase in global wheat price seems unlikely in the short term.
Continuing dry weather in Australia may lead to an increase in the basis, however with much of last year’s crop still in warehousing, local wheat supply could still be in excess of demand.
Currently the CBOT December 2016 Wheat Futures price is A$242/tonne equivalent and the APW Multigrade price is $259/t delivered port, reflecting a positive basis of A$17/tonne.
The domestic price at present is approximately a Decile 2 price, calculated on prices from 2009 to date.