July 21, 2009
Australian wheat supply tight, keeps market firm
A shortage of available wheat from Australia has helped prices hold up well internationally, around A$300 (US$243.50) a tonne, on rail track at Kwinana export port, Josh Roberts, senior trading and marketing manager at the Grain Pool unit of Cooperative Bulk Handling Ltd., reported Monday (July 20).
"Recent demand from Iraq and other destinations that have a specific requirement for Australian white wheat has helped keep the market firm," he said in a brief statement.
Bulk wheat export arrangements, which saw a monopoly operated by AWB Ltd. give way from July 1, 2008 to a system whereby many companies export also "has definitely created competition among Australia's accredited exporters, providing further support to the values shown to growers," he said.
Looking ahead, Roberts said wheat prices for 2009-10 are expected to remain fairly flat or possibly soften as new crop supplies from Northern Hemisphere origins satisfy seasonal demand.
Using an assumed Australian dollar exchange rate of US$0.80, Grain Pool expects prices will be within a range of A$280-A$330/tonne through to June 2010.
Any significant upside in wheat values will depend on production concerns developing in the world's major wheat growing regions, he said.
Cooperative Bulk Handling operates a monopoly over grain export logistics in Western Australia, a major global supplier of traded wheat that accounts for more than half of Australia's total wheat exports.
US$1 = A$1.23 (July 21)
