As the saying goes 'timing is everything', and the rumours last week that China was about to add wheat to its ever-increasing list of banned Australia imports could not have come at a worse time for Australian grain growers.
Just as the enormous Australian winter crop harvest moves into top gear and grain growers look for some harvest cash flow, buyers ran for cover to assess the impact of the potential ban - and prices fell accordingly.
Queensland wheat values were the hardest hit, with port bids for the benchmark grade of Australian Premium White (APW1) tumbling more than $40 per tonne by week's end.
The impact on the lower protein grades, such as Australian Standard White (ASW1) and the minimum stockfeed wheat grade generally acceptable for livestock rations (SFW1), was not as dramatic. But they still fell $20/t and $25/t respectively.
Price declines in New South Wales were less, with APW1 down by about $25/t in the northern half of the state (Newcastle zone) and $15/t in the south (Port Kembla zone).
The fall in ASW1 values was greater in the south at $20/t, which is about double the reduction in the north.
Winter crop production in New South Wales is set for a massive turnaround, compared to the last couple of drought-devasted years.
Wheat will be a 'bin buster', with forecasts in excess of a record 13 million tonnes now common, which is three million tonnes more than what the state produced in the 2016-17 season.
This is already putting pressure on the state's storage and handling system.
There are reports in the north-west of NSW of sites filling-up - and harvest is less than 75 per cent complete.
Growers are delivering grain quicker than it can be railed out to port, and the grower is a willing seller despite the fall in values.
Wheat bids in Victoria fell by about $20/t across the board, and in South Australia it was a little higher at $23/t.
Western Australian values fell by only $15/t across all of the major grades last week, making it the most expensive wheat in the country - which is quite a rare occurrence considering the state's eternal export focus.
The fall in prices relative to global values has been so dramatic that, for the first time since 2016, the cost of Australian wheat delivered into key South East Asian destinations is now lower than that of Black Sea origin.
Late last week, Australian wheat (APW) was reportedly being quoted at US$275/t, including cost and freight (C&F), for January shipment - compared to similar quality wheat out of the Black Sea region US$10/t higher at US$285/t.
China is Australia's biggest trading partner, accounting for more than one-third of the nation's export income in 2019.
The imposition of a ban - or some sort of trade restriction - would represent a further escalation of trade tensions between the two countries.
If confirmed, wheat would join a list that already contains barley, sugar, coal, copper ore and concentrates, beef, timber, red wine and lobster.
There was a hint back in September that such action may be imminent. when Chinese customs officials stated that they would be increasing testing on Australian shipments - with a focus on insect pests - after some issues with barley imports.
The news of the likely ban was apparently delivered with a strong warning that Australian shipments would also be rejected if Chinese importers tried to bypass the restrictions by re-routing wheat cargos via a third country.
However, the impact of a Beijing ban on Australian wheat imports to China needs to be kept in perspective.
China's importance as a destination for Australian wheat is not nearly as great as that of barley.
Prior to the imposition of the barley tariff in May, China accounted for an average of more than 60 per cent of exports over the last five years.
During the same period, shipments of wheat to China only exceeded 10 per cent of total exports on one occasion, and that was last season when national production was one of the lowest on record.
Export data for the 2019-20 season reveals that China imported around 1.4 million tonnes of Australian wheat - or about 20 per cent of total exports.
But this was up from 0.2 million tonnes - or less than 3 per cent of total exports - the previous season.
Probably the best year with which to make a meaningful comparison would be the record production year of 2016-17.
Shipments to China in that season were just under two million tonnes - or about 9 per cent of total wheat exports.
That number is in-line with many forecasts for exports to China in the 2020-21 season, prior to the talk of a ban.
With one of Australia's biggest ever wheat harvests well underway, the nation's exportable surplus is now forecast to be north of 23 million tonnes, and exports could be as high as 20 million tonnes.
That means that about 10 per cent of this year's wheat export program is potentially looking for a new home.
But with Australian values so competitive into Asia, and even further afield into regions such as the Middle East and Africa, the task has been made a little easier.
A big part of it will be renewing relationships with traditional customers who have been shopping elsewhere over the last few years when Australia had a run of poor seasons.
In fact, it is highly likely that many of those traditional Asian consumers will be actively seeking offers of Australian wheat on account of superior quality relative to other origins.
The biggest question is, what happens to domestic prices?
Being competitive into the export market suggests downside should be minimal.
But we are not close to the peak of harvest, and the price pressure has only just begun.
The trade and consumer will be buyers, but I doubt they will have the appetite to buy the entire crop at harvest.
