In the past six months, global agricultural commodity markets have navigated through the COVID-19 pandemic with a very strong bullish undertone.
Since August 2020, March Chicago Board of Trade (CBOT) wheat futures have picked up by US185 cents per bushel, corn is up US110c/bu and soybeans are up US550c/bu.
Global demand for agricultural commodities has remained strong, with further emphasis placed on food security during the virus pandemic.
La Nina weather patterns have resulted in prolonged dryness throughout the Northern Hemisphere growing regions.
This is coupled with an increase in Chinese feed consumption, as the country rebuilds it domestic pig herd that was earlier decimated by swine flu.
The fund buying has also been significantly stronger, with traders encouraging the sustained rally across the major commodities.
As with all good things, they must eventually come to an end at some point - and grain markets are no exception to the rule.
Starting off the Australia Day week this week, US markets closed heavily in the red.
Much-needed rain was recorded across South America, and the extended forecasts are optimistic that there is more to come.
This weather event triggered short selling and profit-taking among fund managers, and a technically bearish pattern appeared late last week.
This resulted in soybeans close limit being down by the end of the day's trade, dragging wheat and corn with it - closing US26c/bu and US20c/bu lower, respectively.
A lower Australian Dollar has managed to briefly buffer domestic values from the full move seen in offshore markets in the immediate term.
The grower is now well sold domestically.
But the challenge now lies with the trade holding the length in the market and the supply chain.
There is emphasis on moving as much product from upcountry to port via road and rail before June, where -leading into the Northern Hemisphere grain harvest - markets are heavily inverted to the tune of $50 per tonne.
Shipping systems are heavily booked. Wheat, barley and canola destined to be exported from all major ports with rail and road avenues to port now require careful planning to ensure efficient loading of all vessels.
We have seen major bulk receival sites, such as GrainFlow, start to accumulate grain from within the system and from farm directly on to trains to further increase the efficiencies of the supply chain and reduce the burden and reliance on road transport travelling to ports.
In what has been a long time coming, it is fantastic to see the GrainFlow sites finally execute in volume what they were designed for - the efficient movement of grain from upcountry to port terminals.
While global markets have reminded everyone about just how quickly things can change, domestically we find ourselves still very well-priced at levels which - after the harvest we have all had - provide some exceptional gross margins across all commodities.
Wheat is priced at more than $300/t delivered both Port Kembla and Melbourne terminals, and barley is trading at $260/t delivered into these same terminals.
Those looking to deliver grain off-farm, throughout Port Kembla Zone are $250/t or better into the GrainFlow network - for both tonnes off-farm and that already in the system.
