SA Wheat Market Update - 10/2/25

Summary

Global wheat prices reach a 3 month high

Constrained Pricing in SA Export Ports

Harvest Tonnage Program – Strategy Update.

The Details

Global Wheat prices reach a 3 month high

As mentioned in previous updates, global wheat stocks are tight with the stocks to use position of the 8 major wheat exports at levels not seen since 2013-14 and basis record tight stocks component.

Over the past 6 months or so, global wheat prices have largely ignored the tight stock position with prices being driven by subdued demand (sluggish global economy pressured by costs of living challenges) and rampant Russian wheat exports. However the recent rally in global corn prices and tightening of Russian wheat export quotas has now focussed the market on the following potential production issues:

Russian Winter Crop – planted in less than ideal conditions, with limited snow cover and unusually warm conditions, making it susceptible to winter kill and short of moisture coming into March.
US Winter Crop – dry conditions have returned to US Winter wheat areas, along with repeated cold snaps, causing significant flashes of worry about winterkill damage.
Indian Crop – unusually warm conditions forecast in the lead up to harvest, coupled with lower than average rainfall in most main areas as we approach the key finishing period.
Argentina – dry conditions impacting on development of the Corn crop.

Northern Hemisphere winter wheat crops come out of dormancy in another 3 – 5 weeks time. Should any of the above issues eventuate into yield limiting conditions then markets are likely to continue the recent bullish tone.

Considering the tight fundamentals of global wheat stocks and potential production issues, growers may want to contemplate getting exposure to any upside in global wheat futures markets. Selling grain at fair value and then buying call options or futures (cash and call strategy) avoids having to warehouse grain pending a lift in global values, generates cash-flow and provides exposure to a rally in global wheat futures markets as demonstrated below.

2) Constrained Pricing in SA Export Ports

Limited grower selling, and risk of not filling cargoes in export zones is restricting the trade’s appetite to buy SA grain. Consequently the trade are running a defensive low risk and cheap ownership strategy across SA Port zones relative to other states, typically basing pricing off more expensive smaller ship configurations. The current low demand environment (driven by a combination of factors including slow Chinese demand, subdued global economy, and tariff/trade developments), is also not encouraging the trade to actively own grain at the moment.

One of the main benefits of Flexi Grain’s Harvest Tonnage Export program is its ability to alleviate these issues and give the grower direct access to the export market in the most efficient way possible for both wheat and barley. It was designed to alleviate these market conditions.

Grower Bids Expressed in FOB Equivalent Values ($US/mt) as at 10/2/25

3) Flexi Grain’s Harvest Tonnage Program – Strategy Update – Closing soon.

At the moment, Flexi Grain is managing the following strategies across SA Port Zones:

Lucky Bay & T-Ports Wallaroo – Accumulating grain for Wheat and Barley export programs to overcome lack of buyer activity (market liquidity) and capture export values not local cash values. Drawing arc includes Viterra sites at Arno Bay, Rudall & Kimba.
Currency Hedging to protect grain returns from any appreciation of the Australian dollar
Cash & Call – Accumulating and physically selling grain when fair market value is realised and buying calls and/or futures in CBOT wheat futures market.

Harvest Tonnage Program – Payment Structure Options