Dry conditions in Russia impact Australian wheat prices

Dry conditions in the northern hemisphere and a bullish forecast from the US Department of Agriculture have helped to bolster wheat prices here at home.

Dry conditions in Russia and a bullish forecast in the latest United States Department of Agriculture outlook have helped to boost Australian wheat prices.

Prices have rallied in the past week, with returns at port jumping to $385/tonne from a base of around $360/tonne a fortnight ago.

On Friday, the USDA released its World Agricultural Supply and Demand Estimates, highlighting tightening global supplies and potential opportunities for Australian growers.

The global wheat outlook for 2024/25 is for slightly lower supplies, increased consumption, and reduced stocks.

World supplies were projected to decrease by 2.2 million tonnes to 1.056 million, with production projected at a record 798.2 million tonnes but lower carry-in stocks for several countries, including China and Russia.

There were also concerns about the climatic conditions in the northern hemisphere and what it meant for the major wheat production area of Russia.

Countries including Australia, India, China and Canada were expected to help offset any production decline that might be felt in Russia as a result of deteriorating seasonal conditions.

Market Check chief executive Nick Crundall said the main reason for the rally in Australian prices was the dry conditions that had emerged in Russia.

“The crop there had been surviving on a healthy soil moisture profile, but they have had hot conditions,” he said. On the flip side Russian wheat crops were also hit by frost which was expected to further impact yields.

“Prices for Australian growers are going well and have been rallying due to the offshore market,” he said.

Craig Henderson of Berriwillock. Picture: David Geraghty

Victorian Farmers Federation grains group president and Berriwillock farmer Craig Henderson said Australian growers were benefiting from the forecasts of drier conditions in the northern hemisphere.

“As a result, we are seeing a strengthening of wheat prices,” he said.

However, he cautioned that there were still vast areas of Australia that needed an autumn break to ensure good winter crop production.

He said seeing prices rally during sowing was a good thing but Australian farmers needed a good season too.