June 19, 2008

Australia's most active ASX wheat futures contract fell Thursday as growers sold to gain from strong recent prices and as the outlook for the crop improved, said Robert Herrmann of agricultural risk management consultancy Ag Concepts Unlimited.

Some rainfall in New South Wales, including in the south, boosted expectations of a higher output and likely weighed on prices, Herrmann said. In a normal year, New South Wales typically accounts for 30 percent of national wheat production.

Around 0540 GMT, the ASX January 2009 contract was down AUS$12 at AUS$366 a tonne, the fall coming despite modest gains Wednesday in US futures.

The bounce in the January contract to a high Wednesday of AUS$380 from AUS$307 on June 5 - what he described as "a beautiful little lift" - means growers would be "crazy" not to be considering selling a little of their expected production, he said.

ASX wheat futures contracts are deliverable in the zones of Port Kembla and Newcastle Port in New South Wales, ensuring keen interest by market participants in crop conditions in the state.