CONFIDENCE is growing of a eurozone resolution and investors are again prepared to accept some risk in their strategies.
As a commodities-based currency, this means the Australian dollar is a favoured currency and we now find our Aussie dollar has returned to the lofty heights of US107 cents.
Without the protection of a lower exchange rate, wheat prices in Australia now fully reflect the fall in world wheat prices based in US dollars.
In May, June and July when our currency was around 107 US wheat futures were more than 7 per cent higher than today.
Wheat prices, both cash and Australian futures have lost around $50 a tonne since achieving the high of late August.
New crop multi-grade APW wheat is quoted at $216 Geelong and Melbourne port basis, or $210/tonne Portland basis.
While the US corn prices remain the key to the direction of wheat prices, the production and stocks of wheat continue to grow.
Last week the International Grains Council based in London raised its estimate for world wheat production by 5 million tonnes to 684 million tonnes.
The expanding production in Australia, the European Union and Kazakhstan accounted for much of this increase.
Importantly the IGC raised carryover stocks estimated for July 2012 by nine million tonnes from the previous estimate a month ago.
Since export restrictions have been lifted, Russia has captured a significant portion of the wheat market including the traditional Middle Eastern markets for Australian wheat.
Although the Russian Government may eventually impose limits on the trade, Russian wheat exports continue to set the price to beat.
Increasingly grain traders are finalising their acquisition of old-crop grain and fully focusing on their new-crop programs.
Next week our tables will reflect new-crop cash and pool prices.
The market still shows buyers of SFW1 wheat at $212/tonne delivered to Melbourne end users with a $20 discount for deliveries to delivery points in the Bendigo and Goulburn Valley regions.
Buyers are bidding $207 delivered Melbourne for new-crop stock-feed wheat.
Canola prices are also easier this week, down $11 to $532/tonne delivered to the port of Melbourne.
Canola values have lost $100 from the seasonal high of more than $630/tonne in late May.
Soybean prices, which underpin canola, are under increasing downwards price pressure, according to traders.
In the US, 90 per cent of the soybean crop has been harvested and exports are easing while the Brazilians set a cracking pace planting their expanding area of soybeans in favourable weather conditions.
