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Thursday, November 06, 2014

Grain markets bounce from late September doldrums – October percentiles

By Augusto Semmelroth  |  Source: ASX, CME, ICE

International and domestic grain and oilseed markets have recovered 10-15% after hitting 5-year lows in late September. Despite the recent rebound, global spot prices remain quite depressed at their 20-30th percentiles. Domestically, the situation is clearly better as a result of a strong basis, with ASX milling wheat and feed barley now back at their 66th and 85th percentiles, respectively. In WA, ASX milling wheat is at its 53th percentile.

Key points:

  • After a strong sell off between May and mid-September, international and domestic grain markets recovered up to 15% in October.
  • Yet, with international grain and oilseeds stocks at very comfortable levels, CME corn, wheat and soybeans remain quite depressed in percentile terms at their respective 20-30th levels.
  • Canola markets are also depressed despite the smaller Canadian and European crop this year as abundant soybean supplies weight down on the whole oilseed market. ICE Canola Jan-15 contracts remain at their 30th percentile.
  • Domestic wheat markets continue to track at a solid premium to international prices with ASX milling wheat Jan-15 around A$70 above CME prices at $292/t by the end of October. This puts wheat at the 66th percentile level this harvest.
  • ASX feed barley Jan-15 is by far the best performing grain across the board finishing October at $253/t, or its 85th percentile. Since then, prices continued to climb higher and were quoted at $261.6/t on November 4th.
  • In WA, ASX milling wheat Jan-15 continues to trade at a small discount to NSW prices, now at $285/t (53rd percentile)
  • Looking ahead to the 2015/16 crop, international prices are faring slightly better than the current spot prices with CME corn and wheat Dec-15 at their 33rd percentile level. Yet, these prices are still quite depressed in comparison to the levels seen since 2009.
  • Domestic 2015/16 crop prices, on the other hand, remain at a considerable premium to global prices with ASX milling wheat at 61st and 53rd percentile in NSW and WA, respectively.
  • ASX feed barley, remains at around its 90th percentile for 2015/16 while CME corn (global feed grain price benchmark) is still at the 33rd percentile. 

Read more about how to interpret percentiles

2014-11-06 Grain Percentiles FIG 1 Lge

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