Australian new crop wheat slips below $200/mt on ample supply

01.09.2016

The cash price of new crop Australian Premium White wheat slipped below $200/mt FOB Western Australia late Wednesday as expectations of ample supply and high end stock inventories weighed on selling indications.

New crop loading over December-January was offered Wednesday at $199-$200/mt FOB WA, down $2-$3/mt day on day.

The decline reflected "tumbling US wheat futures contracts" and softer Australian foreign exchange rates, one trader said.

Traders on the east coast of Australia were heard lowering offers aggressively this week amid higher-than-average end stocks and a looming bumper crop.

Selling indications from east coast Australia were heard almost $10/mt lower than from the major exporter region of Western Australia in a bid to attract export business; freight rates from Australia's east coast are typically $2-$3/mt higher than from the west.

The lower Australian prices were attracting buying interest from both major millers in Southeast Asia and nearby countries such as Papua New Guinea and New Zealand, resulting in several buy tenders for January-March, traders said.

"Australian wheat now is very attractive for buyers and trades are picking up these two weeks; we are seeing a cumulative 500,000 mt/week of inquiries from Southeast Asian millers," a trader in Australia said.

APW loading in November, or old crop, was assessed at $203/mt FOB Western Australia Wednesday, down $2/mt day on day, and at the lowest since Platts began assessing APW in November 2015.

Market participants estimate old crops currently command a premium of $5-$10/mt to new crops, as it is the end of the marketing season for old crop and the quality of the new crop has yet to be confirmed.


platts

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