Grain Market Update - Wheat (April 2017)

The following graph shows the movement in Chicago (CBOT) December 2017 Wheat Futures price and the 2017/18 APW Multigrade price delivered port.

Since early January both the futures and domestic price have remained flat with the basis at or close to zero.

Currently the CBOT December 2017 Wheat Futures price is A$228/tonne equivalent and the APW Multigrade price is $233/t delivered port, reflecting a positive basis of A$5/tonne.

The domestic price at present is approximately a Decile 1 price, calculated on prices from 2009 to date. This provides little incentive for hedging at current values.

Assuming freight to port of $38/tonne, the present Multigrade price represents $195/tonne local depot. This compares with the average budgeted Break Even Price for clients in 2016 of $190/tonne and $165/tonne for the top 20%.