Australian Grain Prices: Impact of Global Trade Dynamics

By Laura Smith
24^th February 2025

Wheat prices have firmed in the last week due to increased export demand and a rising international market coupled with increased domestic consumer demand extending coverage further out. Southern areas of NSW have missed out on much needed summer rains propping up feed grain prices as farmers look for more supplementary feeding options. Growers early in the year have been reluctant sellers across the east coast. Buyer demand had also been thin and this recent increase in prices has been welcomed as growers look to take risk off the table with domestic and export buyers welcoming the liquidity. 

Australian exporters have been successful putting on sales as the price spread between Australian and Russian wheat has reached a three-year low. This in part is driven by reduced China demand and production tightening supply in Russia, signifying increased competition in the global wheat market. Factors to watch in 2025 which will affect wheat prices include global demand, production levels and international trade dynamics. Current prices and export sales are very supportive for the grower as Australia produced 31.9m tonnes up from 26m tonnes last year, with Russia looking at a potential drop in production of 8.9m tonnes. This price spread is important to watch at it has the potential to tighten over the coming months andinternational buyers will be closely watching freight spreads from both countries a Australian grain is currently sitting at $4/mt more expensive than Russia into the UAE. 

Australian Canola demand remains strong exporting 1.48m tonnes in the first quarter of the crop year to various market including Japan, Germany, Belgium, France, Pakistan and the UAE. The recent development of China’s anti-dumping policy has the potential to shift global canola trade dynamics. While it is still unknown it has the potential to increase China’s demand for Australian canola, however there is still black leg fungal disease concerns which is present in Australian crops. 

China has come into the market as a keen buyer of Australian Sorghum continuing the strong partnership between both countries. With potential trade wars between the US and China, Aussie sorghum is presenting as a preferred purchase while also being very price competitive. Sorghum prices have remained firm the past week, with no new additional inputs causing price changes, drop over night in AUD will be supportive of prices. 

As of February, Barley prices have seen a slight improvement with increased demand from China and a weaker AUD supporting prices. Domestic users are looking to extend coverage out to April-May.With growers not rushing at current price points, supplementary feeding is providing price premiums for smaller volumes in the near-term as growers await the Autum break.