ROADNIGHT MUSING – NOVEMBER 2025
GRAIN PRICE OUTLOOK (HARVEST 2025/26)
Q&A WITH LEADING GRAIN TRADERS, ANALYSTS & EXPORTERS
INTRODUCTION
In preparing this edition of Roadnight Musings, we spoke with several grain traders and market analysts and drew on current
industry commentary to form a consolidated view of how the 2025/26 harvest is shaping grain markets. The insights below
summarise the key themes emerging across wheat, canola, barley and faba beans — and how local and global forces are
likely to influence pricing over the next 3–6 months.
1. GLOBAL MARKET DRIVERS AFFECTING AUSTRALIAN GRAIN PRICES
Q: What are the major global forces influencing Australian grain prices right now?
A: Global demand is steady but cautious, with some buyers delaying larger positions ahead of northern hemisphere supply shifts in early 2026.
Black Sea exporters — particularly Russia — remain a major influence, with competitive export volumes continuing to weigh on global futures and Australian export bids.
North American and EU conditions remain variable. US dryness and patchy European quality could tighten milling spreads into early 2026.
Freight rates have stabilised from 2022 highs, improving export competitiveness modestly.
The AUD/USD remains a material headwind; a 1c movement typically shifts export parity by roughly $4–$6/t.
China continues to participate actively in the barley market, while its wheat and canola purchasing remains more intermittent and opportunistic.
2. DOMESTIC SUPPLY CONDITIONS
Q: How is the size and quality of the Australian harvest shaping prices?
A: National wheat and barley production is tracking above the five-year average, with reports of variable quality in parts of NSW and Victoria following patchy late-season rainfall.
Canola production is solid without being excessive, with oil content variable in some southern regions.
If harvest finishes as forecast, the national winter crop production is expected to deliver 66.3m tonnes, which is a 10% increase year on year, 35% above the 10-year national average and potentially the second largest total crop on record. Victoria is expected to be up 17% year on year.
Storage constraints — particularly in WA and NSW — are keeping near-term harvest pressure elevated.
Most analysts expect a modest seasonal recovery once harvest pressure eases, contingent on stable demand and FX:
Wheat: +$10–$20/t
Barley: +$10–$20/t
Canola: +$20–$35/t
Faba beans (sound quality): +$20–$40/t
3. COMMODITY-SPECIFIC OUTLOOKS
WHEAT (APW, H2, Feed)
Q: What’s the short-term picture?
A: Harvest logistics and port congestion continue to push bids below export parity. APW values remain soft, and feed wheat is heavily discounted where weather has affected quality.
Higher-protein wheat retains strong demand into Indonesia and the Philippines.
Medium-term outlook (Jan–May 2026):
APW: +$10–$20/t
H2/H1: +$15–$25/t
Feed: +$5–$15/t
Upside depends on milling spreads tightening and a softer AUD.
CANOLA
Q: What does the immediate market look like?
A: Harvest pressure persists; crushers remain well covered, and European buying is selective. Oil percentage is a key determinant of spreads and bids.
Medium-term outlook (Jan–May 2026):
The outlook is mildly constructive, supported by:
Relatively stable global crush margins
Firm EU renewable diesel demand
Ongoing variability in Canadian supply
Most traders see moderate recovery potential in the order of +$20–$35/t into autumn.
BARLEY
Q: What’s happening in the barley market?
A: Short-term pricing remains soft, though China’s participation continues to provide a floor for feed barley values, albeit at more normalised volumes.
Malting spreads remain narrow but could widen modestly post Lunar New Year.
Domestic feedgrain demand — particularly from feedlots — is an important stabilising factor this season.
Medium-term expectations:
WA remains the national price setter
China’s buying interest is expected to continue but may vary week-to-week
Analysts generally expect +$10–$20/t improvement by March–May.
FABA BEANS
Q: How does the market look this season?
A: Egypt remains the major buyer, with firm demand following a challenging European season. Quality remains the key driver, with staining or colour defects widening grade spreads.
If quality holds:
+$20–$40/t rally potential once harvest pressure clears
Additional upside if Egypt sustains purchasing into Q1
Faba beans continue to exhibit season-to-season volatility, and sentiment can shift quickly if major buyers pause imports.
4. OUTLOOK FOR THE NEXT 3–6 MONTHS
Upside risks:
Northern Hemisphere production issues (US dryness, pockets of EU weather risk)
AUD weakening below US65c
Continued strength in Southeast Asian milling demand
Tight Canadian canola supply
Ongoing interest from Chinese barley buyers
Downside risks:
Large Russian export volumes
EU biofuel policy tightening (canola risk)
Storage bottlenecks forcing grower selling
Sustained AUD strength
Scenarios (Mar–May 2026):
Bull case: +$30–$50/t if global weather tightens supply
Base case: +$10–$30/t recovery as harvest pressure eases
Bear case: Flat to –$10/t if export competition remains heavy
5. WHAT FARMERS ARE DOING RIGHT NOW
Grower behaviour this harvest is consistent across states:
Selling lower grades early to manage cashflow and storage
Storing higher-quality grain (H2, high-oil canola >44%) in anticipation of improved pricing
Strong use of on-farm storage in WA, SA and Victoria
Minimal forward selling, with many growers waiting for clearer post-Christmas signals
Many growers believe current harvest bids do not reflect fundamentals or represent longer-term fair value, prompting increased use of storage and selective selling.
6. RISK MANAGEMENT COMMENTARY
Tools being used this season include:
Swaps: selectively for wheat; limited uptake in canola
Basis contracts: attractive where local basis is weak relative to global benchmarks
Deferred delivery options: avoiding sales into harvest lows
Storage strategies: preserving optionality rather than committing to early sales
Key message from traders:
Avoid selling everything at harvest — optionality remains valuable.
CONCLUSION
Despite harvest pressure, large WA crops and continued Black Sea competition, the medium-term pricing outlook remains cautiously constructive. FX will continue to drive local bids, while domestic storage and export program demand will shape basis levels.
Growers with storage — and the ability to defer — appear well positioned to benefit from potential market improvement once northern hemisphere supply signals become clearer.
The views expressed in this publication consolidate publicly available market commentary and anecdotal harvest feedback. They are provided for general information only and should not be interpreted as forecasts or financial advice. Market conditions can change quickly and readers should consider their own circumstances before making marketing or risk-management decisions.