Uncertainty in northern hemisphere spring weather and how that's impacting crop conditions is seeing the market build risk premium into international grain prices.
Independent global market analyst Argus report physical wheat prices offered, bid, and traded, into southeast Asia have continued to strengthen.
Chicago Board of Trade (CBOT) wheat futures were up nearly 10 per cent for the week at time of writing.
In Australian dollar terms the increase in CBOT wheat was closer to 8pc given the lift in the Australian dollar, resulting in a A$27 a tonne lift for the week.
Earlier in 2024, global and Australian consumers were generally sitting on the sidelines as prices retreated meaning they didn't have a lot of grain on their books.
Consumers are now actively wanting to get more cover given deteriorating conditions in parts of Russia, France, and north America, during critical growing periods for both winter and spring crops.
Dry conditions in large parts of western and southern Australia are also prolonging the autumn feed gap for livestock producers and maintaining uncertainty over Australia's 2024 crop potential.
This saw the intensity of demand for Australian grain continue its recent increasing trend last week creating further broad improvement in Australian grain prices.
Another record 55 different buyers purchased grain offered for sale on Clear Grain Exchange (CGX) last week.
An additional 64 buyers were searching and bidding on grain offered for sale on the exchange. Buyers made over 10,000 searches for grain through CGX last week.
These numbers indicate heightened demand and buyers trying to secure Australian grain.
Another indicator of strong demand are reports of a general lift in 'private' bid activity, where buyers are bidding prices direct to growers or their agents on the proviso that it's not shared.
Often private bids can make growers feel they're getting a special deal which may make the bid more attractive and create a higher willingness to sell by growers.
If other buyers were aware of the private bid, they would know the price they need to be at or above to buy grain.
Private bids can result in buyers securing grain at a price without creating further competition from other buyers and is often more prevalent when demand for grain increases.
Growers that are offering grain for sale to all buyers are giving every buyer the chance to put their best foot forward to buy grain.
This helps create more transparent and efficient markets where the buyer with the highest demand and highest willingness to pay gets the grain.
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