Australian Buyers Pass on Price Falls No Faster Than Rallies

A long-standing complaint among grain farmers is that wheat buyers pass on price falls faster than rallies. But does this really happen?

To test this, almost 11 years of wheat prices from September 2015 to August 2026 were analyzed, comparing CBOT wheat futures with physical wheat prices at various Australian ports.

The study found that when Chicago rallied by more than A$10/t, the average first-day response in Australia was about 23% of the move. In contrast, after a major fall, the response was around 21%.

This suggests that buyers do not pass on price falls significantly faster than rallies. However, some ports showed different behavior, with Port Kembla being the clearest example where falls tended to reach 20-25% pass-through faster than rallies.