June 20, 2012

Australia's wheat stocks down 16% in May

The Australia Bureau of Statistics said on Tuesday (June 19) that the country's wheat stocks dropped 16% at the end of May from a month earlier to 15.93 million tonnes, the largest monthly draw-down in at least three years.

The largest draw-down of wheat in bulk storage came from the east coast, dropping two million tonnes on the year, while South Australia saw a fall of 1.5 million tonnes.

Luke Mathews, commodities strategist at the Commonwealth Bank of Australia, said cheap prices had fuelled exports.

"Relatively cheap east coast and South Australia wheat relative to Western Australia and international origins supported this buoyant export sales programme," Mathews wrote in a research note.

"However, because of the recent rise in east coast wheat prices, the pace of disposal is now likely to slow, in our view."