AN ODD pattern is emerging in Australia's old crop grain market, with grain moving at levels far above official public bids from the major grain buyers.
Cash prices for remaining 2018-19 stocks with the majors have followed international futures and slumped dramatically throughout 2019 to sit $70 a tonne or more below the highs set last year.
On the east coast prices of around $330-350/t delivered port or end user for APW grade wheat are common, with a marked narrowing of the spreads between Victoria, which produced some grain last year, and Queensland, which had a virtual total wipe-out.
In Western Australia, a value of $260-270/t port is more general.
However, there have been prices of $30/t above publicly posted cash bids available on the Clear Grain Exchange, while farmers are also saying there are private sales at levels not that much different to harvest.
Malcolm Bartholomaeus, Bartholomaeus Consulting, said the big dip in old crop values was likely a simple matter of supply exceeding demand.
"There is plenty of grain coming across from Western Australia to meet east coast demand and with world prices below those on offer in Australia, it is putting pressure on the values."
However, Nathan Cattle, Clear Grain Exchange managing director, said growers needed to look past the headline number to get the best price for their grain at present, saying as much as $30/t above the public bid had been paid on his company's platform.
"There are more grain buyers then those advertising public bids and I hope growers are not undervaluing their grain," Mr Cattle said.
Grain Producers Australia (GPA) chairman Andrew Weidemann confirmed there were higher prices for those that looked hard and said he was not sure there was a surfeit of grain on the east coast.
"Certainly the larger buyers have brought their prices back, but farmers are not selling at those prices.
"We've had some good rain, but as the old saying goes, it doesn't rain grass, and there is still going to be a substantial demand for grain on the east coast until new crop supplies come online.
"This is being reflected in sales that aren't reflected in the public bids, there is a lot of business going on, farmer to farmer or to smaller buyers at higher levels which is more reflective of where the market is at."
Xavier Martin, who farms on the Liverpool Plains in NSW, had a similar take.
"There is grain moving at values well above that seen in the public bids."
Duncan Young, WAFarmers grains section president, said WA farmers, after a good harvest, were being patient and not selling at current values.
"There's a couple of things in play, generally they've satisfied their cash flow requirements and are happy to wait for a lift in values and there is also the tax component, meaning if they've held grain this long, they'll probably now look to execute sales in the new financial year.
Mr Bartholomaeus acknowledged grower selling may have slowed in recent months, but added there were still good volumes of trade-owned grain servicing demand at present.
Mr Cattle said the depth in the market past the major traders was reflected in the number of buyers on the CGX.
"So far this season we have had 30 different buyers buy grain through Clear Grain Exchange in Western Australia alone, 23 different buyers in SA, and 42 in the eastern states."
He said since Easter, CGX had traded 38,000 tonnes of grain, 30,000t of that in WA, and averaged $13/t above the best public bid for the same grade at the same location as collected by Profarmer, with maximums a whopping $30/t above cash prices offered on the day.
Mr Cattle said this was not a matter of limited tonnes meeting one-off demand, saying some of the outperforming bids on CGX were for volumes as high as 5000t.
"There is reasonable demand for grain at values well above current public bids."
The story Higher grain prices on offer for those who look hard first appeared on Farm Online.