Grain Market Update - Wheat (July 2021)

The following graph shows the movement in Chicago (CBOT) December 2021 Wheat Futures price expressed in A$/tonne and the 2021/22 APW Multigrade price delivered Port Kembla. Also included is the 10 year average CBOT December Futures price expressed in A$ and the 10 year average APW Multigrade price at Port Kembla.

Wheat prices have continued to fluctuate since the middle of March, largely due to international production related factors, such as hot and dry weather conditions in Canada’s Prairies and the US’ Northern Plains, plus cooler than normal weather in Russia’s grain growing regions.

Currently the CBOT December 2021 Wheat Futures price is A$320/tonne equivalent and the APW Multigrade price is $299/tonne delivered Port Kembla, resulting in a negative basis of A$21/tonne.uch on crop inputs.

This compares with a positive basis of approximately A$27/tonne at this time in 2020. The average basis at this time of year is approximately positive A$34/tonne.

Despite the negative basis, the current domestic price is $6/tonne higher than the long term average. This coupled with a full soil moisture profile, provides the opportunity for growers to generate high returns, even with average conditions from the present until harvest.

The current APW Multigrade price at Port Kembla is approximately a Decile 5 price, calculated on prices from 2009 to date.

Assuming freight to port of $38/tonne, the present Multigrade price represents $261/tonne local depot, which is well in excess of clients’ average Break Even Price of $204/tonne at budgeted yields.