August 3, 2012
As a clearer picture emerges regarding production from Black Sea crops, the world wheat market is tightening and Australian wheat values should be well supported.
Northern hemisphere spring wheat crops are at risk, and given a tight global balance sheet, harvest progress in winter wheat crops will be watched closely for any quality concerns, Australian Wheat Board's (AWB) Richard Williams said in a statement issued Thursday (Aug 2).
"Australian weather during August and September will be critical for the global wheat market this season given reliance on Australia's exportable surplus to meet global demand," he said.
Forecasting wheat prices in the crop year that began April 1 is challenging, as international wheat prices remain volatile and external factors, such as continued global financial uncertainty--especially in Europe--will continue to influence markets, he said. Williams was commenting while issuing AWB's first price estimates for its collective sales of wheat grown in 2012-13.
Australian Premium White grade one of 10.5% protein in the eastern pool is estimated to return AUD345 (US$361) a tonne, free on board, while APW grade two of 10% protein in the western pool is estimated to return AUD350 (US$367)per tonne.
Farmers who elect to make an early commitment to either pool will receive a premium of AUD15 (US$16) a tonne, which represents the value AWB believes it can extract from its global footprint and insights, forward derivative and currency markets via structured hedge programmes and greater forward planning for logistics efficiency.
Australia is forecast to produce 24.1 million tonnes of wheat this crop year, down 18% on year, according to the Australian Bureau of Agricultural and Resource Economics and Sciences.
About three-quarters of forecast output this crop year will be available for export, usually making Australia one of the leading suppliers to the global trade.