US wheat prices have continued their weaker trend, falling a further $3.05 a tonne equivalent last week.
This is the third week in a row of lower prices, which are back to the low levels of mid-December.
There has been a rapid start to spring planting of wheat in the US and weather conditions remain favourable for a great start to a spring growth spurt.
One factor that appears to be supporting the market is how low prices have gone. China faces record high domestic corn prices and is rumoured to have bought large volumes of US corn at near their weak levels.
Traders on US futures markets are also thought to carry large short wheat positions, speculating that prices will continue to fall.
Any fundamental change that can support grain prices will test the resolve of these traders.
Late last week prices did recover, with a surge due to hot weather in Eastern Europe and the large Chinese buying.
Australian wheat values are maintaining a tight trading range, burdened by the large wheat stocks that will carry over into the new crop season later this year.
Most export prices were lower last week.
H2 wheat values were lower in most port zones, falling $5 to $212/tonne in Melbourne and Geelong and $1 easier in Portland and Port Adelaide zones.
AGP wheat values were an exception, with values lifting in all port zones of southeastern Australia. Growers in southern NSW saw a $12 lift in AGP wheat to $198/tonne on a Port Kembla basis.
AGP wheat values were $2-$4/tonne higher in South Australia and Victoria. Domestic trading of wheat is slow, but in a rising trend. ASW wheat is trading at $210/tonne delivered to Melbourne stockfeed mills.
While there has been some selling of new crop canola, brokers report little selling activity for new crop wheat.
The risk premiums needed for growers to commit wheat and barley for firm tonnage contracts do not exist in today's market.
New crop APW values are now under $230/tonne on a port basis.
Even if H2 wheat is priced at $15 higher and H1 at $30 more, these prices are not attracting growers' selling interest.
If harvest conditions are unfavourable, any feed wheat delivered on forward contracts will suffer a $50/tonne discount.
This would price feed wheat at less than $140/tonne delivered to a Mallee silo.
Brokers have analysed these prices and current new crop values would be in the bottom 30 per cent of values offered in the past ten years.
Growers' selling interest is thought to start at least $30/tonne higher than these levels, although this may change as the year progresses.