September 18, 2012

As strong exports continued amid global supply worries, Australian wheat stocks at the end of August dropped by about a fifth from a month ago.

Government data showed on Monday (Sep 17) that dry weather in Australia and fears key producer Russia will curb overseas sales have fuelled worries about global supplies. This comes at a time when benchmark Chicago prices have surged almost 40% since mid-June as the worst drought in 56 years grips the US grain belt.

Wheat stocks in Australia fell to 9.1 million tonnes at the end of August, down 2.4 million tonnes from the end of July, the Australian Bureau of Statistics said.

All states recorded a decrease in stocks, though Western Australia recorded the largest decrease with 806,000 tonnes sold, the data showed.

"We are seeing increased interest in Australian wheat, but compared to other markets, Australian wheat is more expensive than French and US wheat," Andrew Woodhouse, a grains analyst at Advance Trading Australasia, said.

Australian wheat prices have started climbing in Asia's physical market because of the unfriendly crop weather.