Australian Grain Markets Split as Northern Wheat and Barley Hold Firm

Northern wheat and barley prices in Australia remained firm this week as growers and buyers weighed the potential for a drier seasonal finish. However, rising input costs are creating uncertainty for farmers.

Cheap Russian wheat continued to limit the upside for global markets, with the Australian dollar value of Russian wheat falling 6% to $210/t, down 24% from last year. Russia has increased protection for vessels in the Azov and Black Sea region and is exploring alternative cargo routes, confirming the physical disruption caused by further attacks involving Russia and Ukraine.

Australia's grain markets are split, with northern wheat and barley values holding firm while canola bids fell sharply across most ports. The fall in canola prices came despite a strong rebound in Canadian futures, which rose 11% over the week.

Rising input costs are a major concern for growers, with Australian urea rising 6% to $824/t and diesel and petrol jumping 10-11%. These increases will tighten grower margins even as crude oil eased. The bigger picture is that grain prices are not collapsing, but the margin between crop revenue and production costs is becoming less comfortable.