Hi YC, Sorry it's taken so long to reply. Been getting used to...

Hi YC,

Sorry it's taken so long to reply. Been getting used to the new format and setting prefs.

My take on CBOT is that although the good/ex rating is below average in the south, the market is still subject to export parity pricing, which is being pressured by cheap Black Sea grain. Coupled with that, Australia will have extremely low carry out this year (note vessels went out of Wallaroo and Portland this week, destined for Brisbane) and there is without doubt, a premium being built into the domestic market, due to a 70% chance of an El Nino event developing and also extremely poor grower liquidity on new crop in recent weeks.

That's my take, rightly or wrongly.

As for price, we're coming into that period where there is usually less volatility, as Australia has already had its 'start' discount/premium priced-up and the world now awaits a look at US deliveries when they arrive.

Given the EC of Oz had a poor year last year anyway, any fall from last year's national crop size will be driven by SA/WA, who both had above average crops. I'm still hearing good things in WA and speaking for paddocks I've seen across SA, I can say that even with decile 2-3 rainfall for Spring, most key cropping regions in SA would still get an average yielding crop out. The subsoil moisture is THAT good. Apart from some localised mice plagues and green peach aphids doing a bit of damage to some canola crops at 4-8 leaf, it's as good of a start as you'll see.

Port prices are $50/t off on MG wheat now and I wouldn't be in any rush to get long Aussie basis. Canola doesn't look bullish either with Canada's excess old crop really pressuring the market down and good world soy bean crops expected. Barley looks to be OK buying at current new crop prices but if you're hedging with feed wheat you'd probably be half concerned about the current spread, given it's come back in a fair bit.