THE STRONG demand for grain for immediate sale has seen big volumes traded on the Clear Grain Exchange (CGX) in recent months.
A hefty export program has combined with intensifying demand for grain from domestic feed grain users, meaning there have been a range of buyers competing for grain.
Nathan Cattle, managing director of the Clear Grain Exchange, said CGX traded its millionth tonne around the start of June.
“We’ve been really pleased with the volumes that have been trading this year,” he said.
Mr Cattle said growers were becoming comfortable using the exchange as a mechanism to try and attract premiums for their grain.
“The last few months, which have been a real sellers’ market, have been great for growers, we’ve seen some strong premiums above published daily prices,” Mr Cattle said.
“For example the trade that knocked CGX through the 1 million tonne mark for the season was for 2,514.25 tonnes of ASW1 wheat at GrainCorp's Milbrulong site in Riverina, which was $11 a tonne above the best public price on the day according to data collected by Profarmer,” he said.
Mr Cattle said there had been premiums for trades on the exchange of up to $15/t.
Overall, up until early June he said the company’s data indicated there was a $3.50/t premium on average over the best public bid.
Mr Cattle said the increased volumes of grain were the key to the success.
“More volume on the exchange generates more value to clients, both buyers and sellers,” he said.
He said exporters had been willing buyers, as they seel to tap into the strong off-shore demand ahead of competition from the northern hemisphere harvest, while domestic buyers were buying on a needs basis.
Wheat has been the dominant commodity traded on the exchange.
Mr Cattle said for the last full week of records, up until June 23, 84pc of the volume traded was in the wheat sector.
He said buyers were still queuing up to get their hands on grain, but sellers, with talk of production issues both with the northern hemisphere crop and here with the newly planted winter crop, were remaining patient.
“This is reflected in increasing prices, both in terms of the wider market and on the bids on the CGX,” he said.
In terms of hot spot locations for trading activity, Mr Cattle said South Australia and Victoria were currently leading the way in terms of CGX transactions.