Australian wheat prices fell sharply last week as news of the bumper yields put pressure on prices, and has many anticipating the size of the crop will grow.
Benchmark ASX wheat futures fell by $16 a tonne to $211, its lowest level since early 2012, as farmer selling stepped up. The declines in ASX wheat replicated the moves in the cash prices across eastern Australia.
Exporter prices into Brisbane port were sharply lower. APW into Brisbane ended the week $14 lower at $215 while ASW was down $15 to $215. Higher protein wheat prices were also sharply down, with APH2 down $12 at $263 Brisbane and H2 $13 lower at $225.
Stockfeed wheat delivered into the Darling Downs ended the week $13 lower at $210 while F1 barley was $5 lower at $195.
The lower prices were replicated across all port zones as farmer selling, in what is now expected to be a record large crop, intensified.
US wheat futures also ended last week sharply lower, making new contract lows and finishing the week around 6 per cent lower, as news of the big Australian yields filter through.
Global markets are now expecting Australia’s wheat crop could be as large as 31 or 32 million tonnes, as news of the massive yields filters through. If realised this would be sharply higher than the USDA’s current estimate of 28.3 million tonnes and would comfortably exceed the current record large harvest in 2010/11 of 29.9 million tonnes.
GrainCorp received close to 2 million tonnes of grain into its eastern states storage facilities last week, as harvest pressure accelerates through southern NSW and Victoria.
Queensland grain deliveries are slowing as the harvest draws to a close. GrainCorp received about 280,000 tonnes of grain into its Queensland storage network in the last week of November, taking total harvest deliveries to more than 1.6 million tonnes. GrainCorp has already taken about a third more grain into its Queensland network this year, with the bulk of this increase expected to be the significantly larger chickpea harvest in CQ.
Recent sharp declines in Australian wheat prices appears to be buying export demand.
There are reports that Australian exporters have sold about half a million tonnes of wheat to India in the past month. India has already imported around 400,000 tonnes of wheat from Australia from July to September with total sales now seen as well over one million tonnes.
India’s wheats are expected to slow March forward as their domestic harvest starts.
Australian wheat has also ousted Back Sea wheat as the cheapest origin into South East Asian markets.
Sorghum prices were mostly steady last week as old crop supplies tighten on exporter buying, despite the sharp decline in wheat. Brisbane sorghum prices were unchanged at $233 while Darling Downs was $4 lower at $222.
Darling Downs farmers are becoming desperate for rain for young sorghum crops. Despite isolated scattered storms during November, most farmers received significantly below average rainfall. Falls were highly variable, but many areas only recorded 15mm to 25mm, well below the longer term averages of 70mm to 80mm.
