Grain Market Update - Wheat (November 2023)

The following graph shows the movement in the Chicago (CBOT) December 2023 Wheat Futures price expressed in A$ and the 2023/24 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.

Currently the APW Multigrade price is $415/tonne delivered Port Kembla, while the CBOT December 2023 Wheat Futures price is trading at A$326/tonne equivalent, resulting in a basis of A$89/tonne, almost the highest basis for the entire growing season. Long term basis data for this time of year is limited, however it is expected that the current basis is at least double the long term average.

Domestic factors, such as harvest pressure and export logistics appear to be a less significant determinant of price at present than in previous seasons. The ongoing dry conditions in the north of NSW and Queensland may be providing some base stability in prices at present. However, with the vast majority of wheat yet to be harvested in southeastern Australia, harvest pressure may significantly increase in the coming few weeks, plus any significant additional rain events will dampen the appetite of traders to over commit at current high prices.

The current APW price at Port Kembla is a Decile 9 price, calculated on prices from 2013 to date. The same decile as 12 months previously.

Assuming freight to port of $38/tonne, the present Multigrade price represents $377/tonne local depot, which should be well in excess of clients’ Break Even Price at budgeted yields.