Harvest is starting around Australia, and some are expecting higher yields than previous forecasts. We won’t really know until the lie detectors get into the paddocks though.
One of the indicators of a good (or bad) harvest is the basis level. It indicates whether the trade believes that the crop will have surplus volumes or not.
The chart below shows the basis between Australian wheat (APW) and Chicago since 2010.
In this chart, we can see that in recent years, we were at a massive discount to Chicago, this being as a result of the huge surplus of wheat – the trade didn’t need to pay up to get what they required.
As El Nino has raised its head and fears of drought have persisted, the wheat has returned to a premium.
The second chart below zooms into 2023, and we can see that the basis really started moving to a stronger premium in August. This makes logical sense. This is the time when we start to get a better insight into whether the crop will make it or not.
As they say, the crop is made in August and September. I would consider that the basis level around the country is strong, verging on a drought level.
Having a strong premium might sound nice, but it generally means there is less to sell. A balance between volume and premium is what is sought.
I would just warrant being careful about holding out forever before locking in pricing. Aim for an average, not the top of the market.
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Matt Dalgleish: Nov 12, 2025
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