February 12, 2008

Buoyed by US wheat, Australian wheat futures hit record highs 

Several Australian wheat futures contracts traded at record highs Monday (February 11, 2008), as strong gains in US wheat futures on Friday helped propel wheat futures in France and Africa to record levels.

Data released by the USDA that the US would have the lowest wheat carryover stocks in 60 years also pushed wheat prices higher.

Australia's prompt wheat contract - ASX March 2008 - traded as high as AUS$504 a tonne, which was also the highest price set Friday for the prompt contract, before settling at AUS$500. The previous prompt contract that expired Jan. 17 settled at AUS$440/tonne.

ASX July 2008 traded up to a record AUS$550/tonne before settling at AUS$540/tonne Monday.

Australian wheat futures are "definitely" supported by surging wheat futures in the US, ASX Agricultural Commodities Market Development Executive Dougal Hunter said.

The March wheat contract on the Chicago Board of Trade traded limit-up in Monday morning trade in Asia, rising 60 cents from Friday's US close to US$11.53 a bushel.

CBOT wheat futures could advance further, according to a report by Goldman Sachs issued late Friday.

Goldman Sachs said in a Commodities Watch report issued late Friday it is raising its 3- and 6-month CBOT wheat forecast in view of the acute shortage in US spring wheat.

However, as wheat prices gain strength, more acreage will be devoted to spring wheat in the US and around the world in the upcoming spring planting, which should help to ease the tightness in supply. Thus the investment firm said it is maintaining its 12-month forecast for CBOT wheat at US$8.50/bushel.