It has been a return to welcome prices for many, following a rally full of emotion and speculation on the markets, both here and globally.
But what is driving this sudden turn of positivity, particularly towards wheat?
With such good pricing on offer but a worrying picture building in Australia, what are the key things to be mindful of in this turbulent market?
Markets have been sensitive to any news related to North America and the Black Sea, whether it is weather or politics.
In recent weeks, the speculative side of the market has been building longs in United States futures markets, based on weather forecasts.
A long position is one that will likely profit from a positive move in commodity values. These positions have helped to squeeze commodity values higher.
Historically, markets tend to ignore Australia early in the season, in the belief that our crop is made or broken in the Australian spring.
Late last month, the US had its Memorial Day holiday with the three-day gap in markets delivering a surprise of a different sort.
Politics trumped the market, as the US administration was again advancing a proposal for 50 billion dollars of tariffs on imports from China, plus blocking Beijing from sourcing US technology. This talk reversed an initial positive trend and Chicago Board of Trade futures markets closed lower across the board.
Before the politics took control, CBOT commodity markets were trending higher, particularly with a seven-day drier forecast for Black Sea production regions.
On the negative side, the US corn crop has largely recovered from seeding delays and the initial crop rating is at 79 per cent good to excellent. There is also a forecast for beneficial rain in the driest Canadian province of Manitoba.
To counter this, weather in the Black Sea region remains a challenge, with reports highlighting Siberia is up to 60pc delayed in the sowing of its spring wheat crop.
Northern hemisphere markets are struggling to look past the yield potential of North America and Black Sea production.
Occasionally there are concerns about Australian production mentioned in global wires, but this is quickly dismissed as being too early.
Historically, markets tend to ignore Australia early in the season, in the belief that our crop is made or broken in the Australian spring.
Unfortunately, we are increasingly thinking the elephant in the room is Australia. There is a significant area of Australian production that is moisture deficit and at the lower end of rainfall deciles for May.
The obvious and unnerving part of this season is the lack of available subsoil moisture.
The focus was on the WA crop, with last month’s rain. Unfortunately, this was not widespread, with the best falls closer to the coast.
Both SA and Vic remain very mixed, with significant areas remaining dry. NSW, particularly to the north, remains very dry.
While too early to talk about drought, it is worryingly dry.
With such high decile prices on offer for barley, wheat, and canola, there is temptation to build large positions based on these numbers.
Certainly, a good base at high numbers provides a significant starting point to your average price, making any later marketing decisions that bit easier. But there is a need to carefully assess the situation and be careful when managing individual circumstances.
For many in SA, this year is starting better than last, with a late break almost everywhere in 2017. But this year is more variable, with some receiving reasonable starts, while others still struggle for seeding moisture.
The obvious and unnerving part of this season is the lack of available subsoil moisture.
The Australian domestic market seems to be teetering on a knife-edge, with some being optimistic towards the season, while others are starting to feel very exposed.
The trade are already taking steps towards a drought market mentality, especially considering the east coast.
When reviewing a position and considering sales at these numbers, it is important to look at what the crop is capable of.
Look to work in terms of what yield needs to be achieved per hectare to cover any contracts by dividing contracted tonnage by the commodity area.
It is still early days, but the data available is warning us all to take a good look and be on guard.
- Details: Rural Directions