Market Morsel: Gravity pulls on wheat

Grain | 5th July 2022 | By Andrew Whitelaw

Market Morsel

The wheat market has come under a lot of pressure in the past two months, but does it still offer a value?

The first chart below shows the ASX and CBOT wheat price for this coming harvest as a weekly average. The CBOT market peaked in mid-may at A$646 but has now fallen back down to A$490/mt.

This is a fall of 32%, at a local level, the ASX wheat contract has only dropped 12%. The futures market has fallen at a much faster pace, bringing our spread closer to positive.

The second chart below shows the spot price for wheat going back to 2010; pricing levels are still strong, for both old and new crops.

The average price from 2010 to the present for each of these zones is below.

  • Kwinana A$306
  • Geelong A$293
  • Port Kembla A$304

Whilst basis remains negative; we at least have the benefits of decent-sized crops to sell. Whilst prices have taken a hit, they are still strong.

The market is still quite tight, and there are a lot of geopolitics involved. The price could easily rise higher, just ensure that you don’t get greedy.


  • Wheat