NEW YORK: GRAIN markets have remained quiet over the shorter holidays period as selling from growers remained subdued, but if recent market conditions continue, there may be more growers drawn to the market to sell.
East coast ASX wheat futures prices have improved $6 a tonne and cash wheat bids from exporters and domestic users have improved $3 a tonne in the past week.
Underpinning the lift in wheat prices has been a lack of grower selling and a lift in the international wheat markets.
Near US wheat future contracts in Chicago lifted $8.25 a tonne last week and Kansas futures were also up.
Prices have been driven by short covering of speculators fearing a future spike in wheat prices as a result of cold weather on the winter wheat crops in the northern hemisphere.
Cold weather and a lack of snow cover in these areas have driven concern the dormant wheat plants may suffer from freezing soils.
Despite the promise of lower corporate taxes in the US, the US dollar is also weaker against many of its trading partners. This has also supported wheat prices within the US. The knock-on impact of the weaker US dollar has been significant for grain exporters.
Early this week the Australian dollar was trading at over US81c, a US6c hike since early December and its highest level since May 2015. The lift in the value of the Aussie dollar has hit the most expensive grains, with canola and chick peas falling. Canola exporters are also challenged by increasing competition for limited rapeseed demand for biofuel markets in the EU.
The EU will be phasing out the use of palm oil for biofuel use after 2021.
Although this is good news for canola prices in the long term, in the short term it has lowered palm oil prices, pushing down European rapeseed values.
Prices for warehoused canola are $3 a tonne weaker at $478 a tonne delivered to Geelong less freight to silo.
However bids of $489 a tonne delivered directly to Geelong and $492 a tonne delivered to Melbourne were being offered to growers who have canola in on-farm storage.
Kabuli chickpeas have been included in our price tables from this week.
The price for desi chickpeas has been rising.
According to traders, Bangladesh demand has appeared earlier than normal and buying from Pakistan is unexpected.
