HARVEST is coming to an end in south eastern Australia, while an extended tail of harvest continues in parts of southern Victoria.
Protracted rains on these southern crops are taking their toll. It is estimated that between 5 and 10 per cent of crops in the Western District will be abandoned this year.
As the grain trade has the ability to buy feed grains directly from the paddock for an extended time, the competition for grain in this final harvested region has been strong.
Grain merchants with semi-tippers and access to domestic feed markets have been chasing grain from accessible field bins.
These buyers are seeking to avoid the costs of buying grain from the central handling system.
Growers and traders have a challenging task of marketing grain to the best of their capabilities.
Stocks of milling wheat are scarce in Victoria, with some suggesting the production of APW wheat will struggle to meet domestic flour milling requirements.
Wheat graded as AGP1 or higher is finding ready markets for milling.
Some less-discerning buyers on the Subcontinent are buying AGP1 and lower grades as inexpensive milling wheat.
In the global grain markets, confidence in commodities has been driving prices.
This has led to record numbers of investors returning to the grain markets, banking on prices heading higher.
However with this increased level of investment comes increased volatility.
A perceived need to correct some recent sharp price rises, combined with profit taking from investors has lead to lower prices for wheat in US markets.
US wheat prices eased to US45 cents per bushel, or around $A20 last week.
There have been ongoing concerns with dry conditions in the wheat-growing areas of both China and the US. About 37 per cent of the Chinese wheat-growing area is considered drought-affected.
Despite this, reopening of ports in Egypt and good levels of purchases by wheat importers helped trigger the selling of wheat.
This price correction was not apparent in corn.
With a substantial portion of Australian wheat and barley now competing for markets dominated by corn imports, corn prices in the US are having an increasing influence this season.
A huge chunk of US corn is used for ethanol production, but some traders are suggesting the corn market may be nearing a peak.