Is there any action in feed grain?

Australian home grain consumption is reported someplace on the ABARES or ABS web sites, but it surely’s not straightforward to seek out.  What is straightforward to seek out and navigate is america Division of Agriculture (USDA) PSD device, which spits the info out shortly. 

Determine 1 exhibits the USDA knowledge for Australian home wheat and barley feed consumption.  The numbers are fairly tough, as indicated by their roundness.  The USDA could be guessing how a lot wheat or barley was consumed in meals and beer manufacturing, and deducting it from the overall, or vice versa. 

The height consumption years are in drought, and we are able to see that in 2024-25 complete feed consumption equalled the height seen in 2020-21 at 9.5mmt.  In 2010-11 feed consumption sat at simply 5.5mmt.

The rise in home feed consumption has been excellent news for grain growers.  It has seen native grain costs monitor at greater ranges relative to worldwide values, as competitors for grain was stronger.  Not was it export or nothing once we had a bumper crop.

Turning to costs, they’ve continued to bounce alongside at near $300/t at port since harvest.  Feed barley has narrowed the hole on wheat this 12 months, however given the exportable surplus, each stay intently tied to worldwide feed values.

CME Gentle Purple Wheat (SRW) Futures are as near an ideal market prediction as we are able to get.  Futures markets soak up all of the accessible info and kind a view on value.  Determine 3 exhibits the futures curve for SRW on the present change price.  The rise within the curve is the price of carry.

There’s all the time the chance that native markets will diverge from CME pricing because of drought and weak grain provide.  This could see native costs transfer to a $100 or extra premium to SRW.  If shoppers are involved about this, they’ll use ASX futures, or bodily contracts.