April 25, 2012

 

 

As Australia's exports picked up pace led by sales of higher quality milling wheat, its wheat stocks dropped by 9% in March from February, government data showed on Tuesday (Apr 24).

 

Traders forecast that exports would remain strong over the next few months. Australia is the top exporter to Indonesia and also a major seller to Korea and Japan, while Chinese exports are expected to grow.

 

Australia's bulk storage of wheat fell two million tonnes from the previous month to 21.3 million tonnes at the end of March, the Australian Bureau of Statistics said.

 

"We expect a similar rate, if not a slightly higher rate of drawdown in April as the export pace for March through to April has been a bit higher," said Brian Dalitz, general manager, trading and marketing at Emerald Trading Group.

 

Stocks of milling grade wheat, which stood at 13.9 million tonnes at the end of March, or 66% of the stored grain, fell 12.6% from the previous month but were up more than a third from a year ago, the ABS said.

 

"We would expect a similar trend of milling wheat will continue to draw down stocks, while feed wheat will do so at a slower rate," Dalitz said.

 

Australia is a big supplier of high quality milling wheat to Asian countries which have increased demand for grain used for noodles and bread. It also supplies feed wheat to countries including South Korea, Philippines, Thailand and Vietnam.

 

Australia enjoyed a bumper 2011-12 harvest, forecast at 29 million tonnes, after soaking rains boosted yields. However, while yields increased, a greater carry-over of lower quality wheat from the previous year has created a stockpile of feed wheat.

 

Australian wheat exports hit a nine-year high of 2.4 million tonnes in February, up 283,000 tonnes or 13% from the previous month. That was nearly double the exports in the same month a year ago and the highest monthly total since 2003.

 

Western Australian storage levels saw the greatest decline in wheat stocks in March, falling 749,000 tonnes, while South Australia had a bigger percentage drawdown as 19.3% of stocks were shipped out.

 

Some analysts warned the pace of Australian wheat exports could be disrupted in April after recent flooding in New South Wales and Queensland. However, Dalitz said he expected leading milling wheat states Western Australia and South Australia to continue to lead a strong export performance.