Australia wheat prices ease on harvest pressure, better supply prospects

Australian wheat prices fell Nov. 29, as severe rains hampered harvest particularly on the East Coast while better-than-expected protein levels signal more availability of milling wheat, sources told S&P Global Commodity Insights.

Prices of Australia Premium White wheat and Standard White wheat dropped $7/mt and $10/mt, respectively Nov. 29 to settle at $357/mt and $315/mt FOB Kwinana, according to S&P Global data.

The country’s wheat marketing year starts from October-September and the harvesting happens in spring and summer. However, severe rains, especially in the East Coast, delayed harvest due to widespread waterlogging at fields and damage to roads and rails.

Western Australia, the country’s largest exporting state, was spared of extreme precipitation and grain harvest commenced on Sept. 27, with canola loaded at Geraldton, according to CBH website.

By Nov. 27, total grain receivals reported on CBH’s website were at 6.932 million mt. Total wheat receivals were at around 3 million mt from Western Australia with over 50% of standard wheat quality, a trading source said.

Over in the East Coast, Graincorp’s latest harvest report up till Nov. 28 showed that grain receivals from Queensland, New South Wales and Victoria were at around 3.04 million mt. Waterlogging and road damage impacted the pace of East Coast harvest. Total receivals on Nov. 29 last year were about 1.5 million higher based on Graincorp’s website.

With the East Coast most affected by the heavy rains, the expectation is that protein would be in shortage in those regions and though exact breakdown of wheat protein is still unclear as harvest is ongoing, the industry estimates that 40%-50% of the total crop could be of feed quality.

The export data, however, presents a different picture, with October-December total shipping volume 1.4 million mt, or 34%, higher in the 2022-2023 season from the previous year.

Western Australia’s wheat exports this season were at around 2.25 million mt, or about 790,000 mt, higher on the year, said Andrew Woodhouse from consultancy Advance Trading.

There is a surge of exports from Queensland, South Australia and Victoria, with increases around 50%-70% on the year.

Exports tumbled 15%, or about 208,000 mt, from New South Wales.

The outflows are stronger currently despite the harvest delay due to the high carry over from last season, which trade sources estimated at 4-5 million mt.

Australia exported 26.5 million mt of wheat in the last season and with another record crop on the books, the country is expecting to ship out nearly as much wheat or even more this year.

Tags: Australia, harvest, export, prices, wheat