I think you are right MM. You only have to look at the...

I think you are right MM. You only have to look at the performance of the Australian wheat price basis. The only two other years where basis in WA has been as strong as it currently is (2013 harvest and now for the 2014 unplanted crop), is the two most recent drought years of 2010 and 2012. That doesn't really make sense because WA had its largest harvest in 2013, whilst the US had a drought in the winter wheat belt in that same year. Basis should really have been very weak to negative as US wheat prices should have priced themselves to ration export demand.

Govts can manipulate futures prices but they can't manipulate the premiums paid above those prices to secure physical supply. The basis in other words is purely trade conducted without any distortion from manipulation or speculators. Basis is making up an increasing component of final farm returns.

And really this is similar to what has happened with the physical gold and silver trade where manipulation is accepted as occurring. Despite low futures prices, physical metals prices are higher and this is the basis.

80 million new mouths a year, plus the ampification effect of the developing world moving from grains up to animal proteins.

Farming is undoubtably the growth sector set to benefit from a collapsing Australian economy.