Australian wheat faces downward price pressure

 

 

Northern Hemisphere influences and domestic factors are combining to exert downward pressure on the price of Australian wheat, logistics provider and trading concern GrainCorp Ltd. reported Tuesday (June 30).

 

"The Northern Hemisphere wheat harvest is gathering momentum and this is placing a dampener on wheat value," with the market closely following the quality of the northern harvest and the tonnages being harvested, the company said in a brief weekly market review.

 

There is significant carry-forward of old-crop wheat in Russia, and this too is weighing on the market, particularly as the Russian harvest gets into full swing, it said.

 

Australian wheat values have eased as conditions improve across most growing areas, with old-crop wheat values slightly weaker due to an easing in export demand, it said, noting that this is expected as many buyers look to new-crop suppliers in the Northern Hemisphere to source third-quarter needs.

 

ASX January milling wheat futures settled at A$263 (US$186.82) a tonne Monday, down A$10 from last Tuesday's close.

 

Meanwhile, barley prices have continued to drift lower in the past week. Australian barley is uncompetitive in international markets as domestic prices for feed and malting grades are above export parity, GrainCorp reported.

 

Domestic barley consumers have been quiet this week, and are only purchasing for short-term positions, it added.

 

Sorghum prices also have weakened, trading below A$200 a tonne on Brisbane city track.

 

This reflects the impact of a stronger Australian currency, limited domestic buying and a continued weakness in corn, it said.

 

Current values have the Australian market positioned slightly above export parity. Japanese buyers are focussing on Argentina, with prices below Australia and the US, it said.