Milling wheat values surged higher on torrential rain forecast to fall on unharvested wheat crops across southern Queensland and northern NSW in the coming days.
Weather models are forecasting areas around Goondiwindi and along the NSW border could receive upwards of 100mm of rain by the end of the week.
Timing on the forecast rain is jeopardising wheat quality. A week of wet weather could see wheat crops normally used for bread wheat production in Australia and throughout Asia reduced to feed quality, only suitable to feed livestock.
ASX wheat surged higher on the forecast wet weather. ASX east coast milling wheat futures, which are based on APW1 quality, finished the week $22 higher at $352 a tonne as exporters chased sound milling wheat to fulfil existing commitments to overseas buyers.
Even larger increases were seen in the high protein wheat grades with APH2 bids ended the week up $26 at $390 Brisbane basis.
Rain across southern Queensland and northern NSW delayed last week's harvest activity. GrainCorp reported close to 300,000 tonnes of grain deliveries into its Queensland network, taking total harvest received up to 1.36 million tonnes.
Grain harvesting across the Western Downs around Roma and Surat is largely complete. The Darling Downs and Goondiwindi regions are about halfway through, but rain and unsettled weather is slowing progress.
GrainCorp took a further 468,000t of grain deliveries into its NSW grain storages last week, bringing the total harvest deliveries up to 931,000t. Wet weather also slowed harvest activity in northern NSW, where harvest is less than 20 per cent complete and just kicking off in the central west and the western Riverina.
Harvest is just starting in Victoria's northern Mallee.
Mounting quality concerns saw Australian wheat prices buck the recent trend and strengthen against global benchmarks.
It was a roller-coaster ride for major global wheat futures, with several making fresh multi-year highs early in the week before coming under selling pressure.
Tight global supplies are forcing overseas buyers to pay up for wheat. Saudi Arabia bought about 1.3mt of wheat for a January to April shipment. The purchase was double the tendered volume and prices were about US$100 a tonne above a similar tender in early November 2020. It's expected that a significant proportion of the tender could be sourced from Australia.
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