Australian wheat price boost as grain trades at premium to global values


THE premium for new season Australian wheat over the global price has soared during the past month driven by dry conditions in Queensland and northern NSW.

Brisbane new season Australian Premium White wheat is trading about $126 a tonne above Chicago Board of Trade benchmark near term wheat futures, while Geelong and Melbourne is $67 to $75/tonne above global values.

It comes after a rally in new crop wheat and barley fuelled by the deteriorating state of crops in NSW and Queensland.

New crop APW wheat delivered Geelong has lifted $42 from the last week in August to be $285/tonne, while Australian Standard White is trading at $270/tonne.

Recent rain in Queensland and NSW has pulled values back marginally. In the past week Australian barley and wheat dropped about $5/tonne in the southern states while Darling Downs wheat dropped about $20/tonne.

Profarmer chief analyst Hannah Janson said the high basis was not surprising given domestic buyers such as feedlotters in northern states were competing with exporters for new season grain.

She said it was a good opportunity for growers to lock in prices.

“If growers have the production it’s a good opportunity to sell into (the current market),” Ms Janson said.

“There is some downside risk — if we have a bit of rain and produce a good sorghum crop, this will pretty quickly alleviate the domestic supply-demand situation (for feed grain).”

She said the high basis could dent Australia’s competitiveness internationally in a year where massive global production was tipped.

“The Brisbane market is trying to price grain to not go to export ... they will not be export competitive at this level, but the Adelaide and Geelong (values) will be,” she said.

AWB Ltd pool manager Charlie Brown said Australia normally exported 11-12 million tonnes to regular customers such as Indonesia and up to eight million tonnes was used domestically.

And in a year of good production up to three million tonnes could be sold to other buyers.

Official forecasts recently downgraded this year’s national wheat crop to about 21.6 million tonnes.

“South-East Asian markets are not going to suddenly switch off demand because of our price,” Mr Brown said.


Readers choice: TOP-5 articles of the month by UkrAgroConsult