Domestic and world markets pull in different directions

International wheat futures rocketed 50 per cent higher to record highs on the news of Russia's invasion of Ukraine as access to supplies from one of the world's largest grain exporters was virtually cut off from global buyers.

War in Ukraine is showing no signs of abating, but global grain markets harvest settled in the following weeks.

Benchmark United States wheat futures tumbled by more than 20pc in the final two weeks as investors assess developments. Despite the widespread financial sanctions, Russian wheat continues to find its way into global markets. It's also evident that the US is unlikely to benefit from the absence of supplies from Ukraine, where export sales following the invasion have remained tepid.

Sharp declines in US futures markets have done little to temper global cash markets which are holding at near record levels for those buyers who need to buy.

It's a similar story in the domestic cash markets, which have paid little attention to the recent sharp declines in US grain futures.

Exporters have lowered bids into country storages with the declines in US futures, although this means little to farmers who are already well sold against last year's winter crop harvest.

Domestic buyers and trade shorts are being forced to pay up to cover nearby positions into the southern Queensland feed markets as they contend with limited farmer selling and rocketing road freight costs. It's a similar story for the delivered destinations through southeastern Australia, including Melbourne. Stockfeed wheat bids rose a further $15 to $390 delivered into the Darling Downs.

Recent rain has pressure northern sorghum bids lower as the more of the crop is downgraded to sorghum 2 and 3.

Stockfeed wheat and ASW is demanding $400 to $410 delivered into Melbourne to attract sellers with barley not far behind at $390 delivered.

Extreme market volatility is likely to remain as buyers and sellers attempt to reconcile the expected absence of much of Ukraine's annual combined 45-55 million tonnes of wheat, barley and corn exports as well as the 8-10 million tonnes of annual rapeseed and sunflower oil exports.

Australian exporters are already reporting strong buying interest for new crop wheat, barley and canola.