Wheat prices: Dry conditions lift global wheat prices
Dryness across Argentina and the Black Sea Region during winter crop planting presents an opportunity for Australian wheat to fill export demand, industry experts forecast.
A GLOBAL lift in wheat prices will play a significant role in preventing Australian prices from dropping lower during harvest.
The finding comes from Rabobank’s October Agribusiness update, with the bank predicting Australian Premium White wheat prices will track between $275 a tonne and $300/t over the next quarter.
As of late last week, APW Geelong prices recorded $301 a tonne compared with $299 a week ago, according to Profarmer senior commodity analyst Angus Thornton.
“At about the same time last year, prices were at $340 a tonne, so they were about $38 a tonne higher,” he said.
Globally, Mr Thornton said Chicago wheat prices skyrocketed last week following the release of a US Department of Agriculture stock report, but softened soon after.
Dry global conditions were mainly playing into rising global prices now, he said.
“On Wednesday the USDA put out that stock numbers were lower than what the market expected,” he said.
“So Chicago prices lifted about $14 a tonne but have recovered since then.”
As of Friday morning, Chicago wheat futures were at $292 a tonne, up $5 a tonne week on week.
“Russia and the Ukraine are planting winter wheat in some of the driest conditions in 10 years,” Mr Thornton said.
“The southern plains of the United States is also dry.”
For Australian wheat futures, January ’21 ASX east prices recorded about $300 a tonne late last week and had been steady week on week.
“We will expect to see selling pressure in the market come harvest,” Mr Thornton said.
Rabobank’s update this month also highlighted dryness across Argentina and the Black Sea Region during their winter planting program. It said dry conditions presented an opportunity for Australia to fill export demand.
“Large areas of Europe and the Black Sea Region are facing severe moisture deficits amid its winter planting program,” Rabobank said.
It said the Ukraine’s planting outlook was a concern.
According to Rabobank, September rainfall in Australia had delivered “finishing touches” to the east coast’s season to date.
“So much so that Australia’s potential to fill in northern hemisphere supply gaps is looking near assured,” the report stated.
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