November 23, 2009

Australian wheat prices up, helped by rain, harvest

Australian wheat futures prices settled higher Friday (November 20), supported by a number of influences, Commonwealth Bank of Australia reported Monday.

In particular, the bank's soft commodities strategist, Luke Mathews, cited the impact of a slight weakening in the Australian currency and a harvest in South Australia and Victoria stalled by heavy rain, with falls of more than 50 millimetres recorded in some regions

Downgrades to crop estimates including in Australia and reports that Indonesia, Australia's largest export market, will increase flour consumption by 6 percent in 2010 "helped support local values," Mathews said in a daily note.

Local weather over the weekend was extreme, with the rainfall and temperatures in central and northern New South Wales soaring to more than 40 degrees Celsius, Mathews noted.

"Further rain is expected in many of these regions from Thursday, which will raise quality concerns," Mathews said.

On Friday, ASX January milling wheat deliverable in New South Wales rose A$2.50 to settle at A$221.00 (US$203.42) a tonne, while ASX March milling wheat deliverable in Western Australia settled A$4.50 higher at A$222.00 (US$204.30) a tonne.

US$1 = A$1.08 (Nov 23)