THE May US Department of Agriculture (USDA) Report confirmed there is no imminent shortage of wheat in global markets.
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While much of 2014 is still to unfold, current projections are global stocks will hold, unless new production issues emerge somewhere, or current problem spots get significantly worse.
On the latter, we are running out of time for things to get a lot worse, but there is still time for new issues to emerge about less than ideal planting time in wet parts of North America, and the range of issues that can hit all regions before crops get to full maturity.
To start our week prices had fallen for eight consecutive sessions, with US62.5 cents a bushel coming off the December futures contract in Chicago.
That 8.2 per cent fall translated pretty closely into the Australian dollar value of December futures, with prices on that measure down $24.65 a tonne.
Of course the price fall has been passed into the Australian forward market.
Interestingly though, our market continues to be split in to three parts.
NSW and Queensland have seen prices hold up, with well documented soil moisture issues in the northern cropping zone causing concerns against low inventories from the 2013-14 harvest.
Newcastle prices have only pulled back by $5/t ($9/t at Port Kembla).
The premium over export values in South Australia is now $37/t, and basis over Chicago Board of Trade (CBOT) futures is $55/t.
In a "normal" market we would expect prices in the Newcastle zone to be export based, at a modest premium over Port Adelaide prices, driven purely by different costs of executing grain into export markets.
Victorian prices are at a second price level, some $20/t under Newcastle prices, but still at a premium to Port Adelaide prices.
Again it is reflecting a domestic influence in east coast prices, which is likely to persist until we get more certainty about production this year.
In the pure export zones of South Australia and Western Australia, cash prices have fallen by $20/t.
This is still less than the move in US futures, with basis levels running at $18/t in the Port Adelaide zone.
This is a strong basis.
Basis levels like these are probably only justified if exports from the Black Sea region are constrained, allowing other exporters to fill the gap at higher prices than normally seen when Russia and Ukraine are exporting more freely.
We now have two risks facing 2014-15 wheat prices.
The first is an ongoing fall in US futures, as they move back down towards end of 2013 levels.
If that is where we head, December 2014 futures would come in closer to $260/t or some $14/t to $15/t under current values.
If global markets then settle down, with strong competition in export markets from the Black Sea region, and if our own crop is not impacted by El Niño conditions, basis levels should also ease into our harvest period.
For NSW growers, that could pull another $30/t to $40/t off prices above $15/t drop in underlying futures values.
For South Australia and Western Australia, a return to "normal" basis, plus an easing in US futures down to December 2013 levels, would see $25/t come off the current 2014-15 prices being shown to growers.
Malcolm Bartholomaeus is the market analyst for Bartholomaeus Consulting, Clare, South Australia.