Wheat Buyers' Price Response Under Scrutiny

A long-held complaint in grain farming is that wheat buyers pass on price falls faster than rallies. However, analysis of almost 11 years of data suggests this may not be entirely true.

Researchers compared CBOT wheat futures with physical wheat prices at various Australian ports from September 2015 to August 2026. They found that major rallies and falls were relatively evenly matched in terms of the price movement passed through to local buyers.

In fact, after a major rally, the average first-day response was about 23% of the CBOT move, while after a major fall it was around 21%. This was consistent across all ports, with some exceptions.

Port Kembla was found to be an outlier, where major falls tended to pass through faster and harder than major rallies. However, even in this case, there was no clear evidence that buyers were systematically quicker to cut prices than raise them.