An indication of things to come, possibly. News that Saudi Arabia has purchased 355kt of milling wheat from Saudi Arabian farms owned by the Saudi Agricultural Livestock Investment Company (SALIC) in Australia, Canada and Ukraine for delivery during the second half of 2021 was interesting. In April 2020 SAGO, the Saudi Arabian state grain buyer, had stated, or invited, Saudi investors abroad to supply up to 10% of the countries annual wheat requirements.
In 2019 SALIC bought the aggregate of Baladjie P/L for what most assume was AUD$60m from John Nicoletti. A 200kha mixed property in the WA NE wheat fields region. The “farm” holds arounds 40,000 head of merino across 30 properties and produces wheat from around 76kha.
The 355kt wheat purchase was said to have been concluded at US$330.04 / tonne C&F. Which bodes well with current cash bids for WA wheat.
US wheat futures moved higher overnight but the stronger AUD will in theory knock about 1/3 of the potential rally out of local bids today. The main market driver continues to be the prospect of damage to both the US and Russian winter wheat crops over the last couple of weeks.
US weekly export volume, which was much lower than trade expectations, was ignored.
Cash bids for wheat out of the US Pacific Northwest were also higher, with both hard red winter wheat and spring wheat climbing more than their underlying futures contracts rallied. White wheat bids were unchanged.