Good time to sell grain

Jo FulwoodThe West Australian

Solid grain prices over the past few weeks have seen increased grower selling activity, particularly as harvest moves into its final stages throughout the northern and central Wheatbelt.

With APW settled in at the $300/tonne range, consultants are saying prices now represent good selling opportunities for growers.

Agvise Management Consultants director Shane Sander said APW prices were currently at levels over the 50th percentile based on five-year averages, with a weakening Australian dollar contributing to recent price climbs of more than $15/tonne.

A strong basis was also contributing to the stronger prices, he said.

But Mr Sander cautioned that prices had been influenced somewhat by domestic port slot auctions, saying this slight distortion was often not understood by growers.

"Wheat has had a little bit of a rally in the last week or so and that's mainly on the back of some winter kill concerns in the US, but that hasn't got a lot of traction and it doesn't look like it will, although there are some weather concerns in parts of the grain-growing regions on the US," he said.

Mr Sander said canola prices had rallied significantly in the past few weeks.

"We were down as low as $450/tonne but we have been trading as high as $500 recently and that has been as a result of market concerns of a soybean meal shortage in the feed markets in the US, and while it appears to be only a short-term supply issue, canola prices have run with that," he said.

Mr Sander said the price differential between GM and non-GM canola had been reduced, and in some cases was non-existent, because the European Union was no longer importing non-GM canola.

Plum Grove director Tony Smith said predictions of a smaller Australian grain crop this year were seeing a premium on Australian grain in the market.

"There are a lot of fundamental bullish reasons for the prices to be where they are," he said.

"Prices have been driven by speculative activity in Chicago, and my view is that we are probably over valued because of that, but at the same time there are also some good fundamental reasons that Australian premiums are where they are.

"Given the outlook for wheat three months ago, which was more like $250/tonne, I would say they are pretty good prices at the moment."

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