May 31, 2010

Wheat exports in the 2009-10 Australian marketing years might fall by 7% on-year due to solid competition in an oversupplied world market, Dutch agriculture specialist Rabobank said.

The bank revised down its estimate for Australia to 13.6 million tonnes in the October-September year from an April forecast of 13.9 million tonnes. Australia's wheat exports totalled 14.6 million tonnes in 2008-09.

Australia has struggled with exports this year due to cheaper supplies from Europe and the Black Sea region, and more recently from ports in North America's Pacific north-west.

Rabobank said there could be some upside to its export forecast if the Australian dollar remained around its current, US$0.848 level after a recent sell-off.

The Australian dollar slumped around US$0.075 in May, lifting the competitiveness of the country's wheat exports and offsetting some of this month's US$20-US$30 per tonne price rise.

Declining exports mean carry-over stocks at the end of the 2009-10 marketing year are likely to be around 5.1 million tonnes compared with around 3.2 million tonnes in 2008-09, Rabobank grains analyst Wayne Gordon said.

"That's a function of slower exports sales and also a couple of reasonable seasons with harvests above 21 million tonnes," Mr Gordon said.

"We expect stocks to peak next year which is similar to what is happening globally," Gordon said.

Rabobank is forecasting Australia's 2010-11 crop, now being planted, rising to at least 21.8 million tonnes from the previous year's 21.66 million tonnes.