Cash values out of the Black Sea were a little lower overnight. Russian milling wheat was valued at US$227.25 FOB, still more expensive that Ukraine milling wheat but back a little from yesterdays conversion. The move in Russian values opposed the move higher for both French and US milling wheat. Both US futures and cash values for HRWW pushed higher overnight.
FOB PNW HRWW was valued at roughly US$230.46 / tonne. On the back of an envelope we can convert this to an equivalent price here on the LPP. It would cost the buyer roughly US$29.00 to ship this to an Asian buyer. This gives them a C&F price of something close to US$260/t. Aussie freight to the same buyer would be about US$28.00 / tonne. Giving the US HRWW an equivalent FOB Aussie price somewhere around AUD$353. Execution and internal freight is here estimated and the net figure comes out somewhere around AUD$290 +/- XF LPP.
Those that are familiar with the milling characteristics of white and red wheat will understand the better out turn for white wheat, thus may demand a premium for white wheat. In the past this has been as much as US$25.00 per tonne. If we are conservative we might call it AUD$25.00/t. This leaves us with a benchmark number, against the cheaper HRWW into Asia, of something close to AUD$315 ex farm LPP +/- for 11.5% milling wheat as fair value in the current market. When compared to other suppliers, even Argentina after their milling wheat shed significant value last night. Aussie H2 wheat into the Asian consumer is still cheaper. Although Argie wheat is now very closely priced to Aussie H2.

Support for wheat came in some way from predictions that Russia may increase attacks on Ukraine ports and boats. Talk about crying wolf to get a rally. Putin stated, in response to recent drone attacks, that the most radical solution to the Ukraine problem would to be to cut off Ukraine access to the Black Sea. I can see the Romanian ports rubbing their hands together on the back of that statement, throughput would increase significantly.

Grades continue to vary significantly across the Liverpool Plains this harvest. Anything from APH1 to SFW1 is being produced. The SE corner saw good rain initially, setting the crop up well before a dry finish, which has seen a number of crops produce higher screenings.
Grades like AUH2, AGP1 are better off being stored on farm and being sold as SFW1 if screenings and test weight are acceptable. Yesterday saw bids into the Werris Creek silo at roughly $302 for these grades. SFW1 has traded at $300 ex farm SE LPP.
To execute system stock from the Werris Creek silo when valued at $302 delivered site to a Liverpool Plains end user, it would cost the buyer roughly $350 delivered using a nominal road rate for freight of $22/t. Currently we are seeing ASW bid at $325 delivered end user, or roughly $300 ex farm equivalent.

H2 moved into the Newcastle port at $360 to $365 delivered Dec / Jan, the higher price being paid for 12.5%+ protein wheat. This option is still available and could also be priced at an ex farm level of roughly $320 – $315, depending on location on the plains.
Overnight global milling wheat values were mixed, Black see a few dollars lower, while French and US PNW milling wheat was a little higher. Should also note that white wheat out of the US Pacific Northwest was up roughly AUD$3.96/t compared to yesterdays conversion.
Local basis to Chicago wheat futures increased 9c/bu yesterday. There is significant grower reluctance to sell wheat at current local values. This is keeping the track basis high, but also making it hard to negotiate with exporters, who continue to claim that export parity is below current cash bids. Comparing different exporters into the Asian market the only red milling wheat I can find that is cheaper than Aussie H2 is US, and that’s not comparing apples with apples.

A high cell will move across NSW today and off the coast this evening. As the high moves east airflow will slowly change from the south east, to the east and turn more north east overnight. Tomorrow will see the return of NW airflow and higher day time temperatures. By Friday we should be pushing into the mid 30’s with the BOM expecting to see 36C Friday and 39C on Saturday.
An early shower or storm on Sunday should give us a slight reprieve from the heat, Sunday climbing to a maximum of 34C. Back up to 37C by Tuesday.

A trough line will dissect NSW on Saturday afternoon. Stretching from Sydney to Cobar, and tracking NE. Airflow ahead of the troughs arrival on the plains will be from the NW, turning SW on its passing.
The trough will move across the LPP on Sunday morning. The ECMWF model predicts that the change will be accompanied by light showers of 1-5mm from the SW, heavier initially around Premer and Spring Ridge.
Storms are likely to develop across the Hunter and along the ranges to our east in the afternoon. Storms may roll over the Liverpool Ranges to the SE producing rain across the Blackville / Willow Tree area around 1pm to 3pm Sunday before breaking down and slowly clearing to the east.
More severe storms are expected east of the ranges.