The lower condition ratings for corn, soybeans and sorghum in the US fuelled further speculative buying in US futures overnight.
The Platts Australian Wheat futures contract at Chicago was sharply higher for the Jan21 slot, jumping US$13 / tonne to US$248 FOB. This would equate to a number of about AUD$262 ex farm LPP for APW1, a number we are not seeing in the cash market here.
SFW1 was bid at $240 delivered Tamworth for SFW1 yesterday. Looking at APW1 delivered say Gunnedah silo at AUD$250 yesterday and converting that bid to a FOB value it still comes in USD$15 below the Platts number. Is this telling us local basis is poor, probably.

The rally in US wheat futures was a mix of technical trade with some fundamental support coming from higher Black Sea values. Last week we saw Black Sea wheat offered at about US$210 FOB for 11.5%, the same wheat out of the USA was offered closer to US$240 FOB Gulf. That’s a lot of freight differential, the Black Sea product would need to rally a lot more to justify the kind of rally we have seen in US futures in recent days. Given the global situation don’t be surprised if this isn’t simply the funds bringing money home and parking it somewhere they can push around. The technical traders see big resistance in US wheat futures at 580c/bu, the weaker USD will be a key, playing in this position will be volatile, they will sell the rallies and buy the dips. Potentially presenting swap opportunities here.
In other predictable news China has banned barley imports from CBH Grain P/L after finding quarantine pests. As an additional slap in the face Beijing also removed CBH’s registration qualifications for barley exports to China. I wonder if they will let COFCO export ?