Wheat pricing this season has been frustrating for growers holding onto grain well after harvest in anticipation of better pricing opportunities. This approach was justifiable if you are to look at the trend of the previous few seasons with prices at times during post-harvest periods in 13/14 and 14/15 above $300/t in most zones and rewarding growers for that approach.

Notwithstanding the dominating issue, that markets have been impacted heavily by an overburden in global supply and a lack of demand to drive buyer accumulation. We have seen the influence of a number of other factors shaping our local price over this season Understanding what is happening and how pricing is being impacted is a big part of identifying opportunities to make sales in the environment we now find ourselves in.

With a lot of grain held over after harvest buyers are making sure not to bid the market up unless necessary, remembering a lot of accumulation and trading companies have struggled to maintain profitability over previous seasons. Volatility and large variations in price have been uncommon so selling into small rallies has been key. Don’t sit out in hope of large scale movements in price.  The lower cost of shipping slots is also a contributing factor and it has become much cheaper for buyers to walk away from a commitment to ship grain. Which they will do if purchasing those tonnes will be a greater loss making exercise than simply exiting their commitment to ship. This makes it harder to identify short term demand and gives rise to the need for greater information about the rolling and exiting of shipping slots by buyers. This adds further weight to the previous point, don’t expect buyers to get caught out with shipping shorts and push the market up to buy tonnes.  Quality is another big factor and has been a big driver of a shift in pricing between port zones. For much of the 14/15 season Geraldton traded at a premium to Kwinana, Albany and Esperance. Last week Albany traded at a $5 premium to Geraldton, so identifying these types of changes is key to extracting market value and executing sales. We are working hard to identify opportunities across all commodities if you wish to discuss further please get in touch with one of our team.