Wheat prices dip as bumper grain harvest regains pace after widespread rain

Australian farmers are harvesting the least expensive wheat in the world and it is getting cheaper by the day.

Many growers are busy harvesting grain much later in the year than normal after widespread rains slowed and damaged much of a bumper grain harvest.

As the harvest rolls on, the value of the grain is falling at an alarming rate.

“It’s probably the biggest downward movement I’ve seen in quite a long time,” Thomas Elder Markets analyst Andrew Whitelaw said.

For growers racing to get crops off the timing is less than ideal.

“It’s different depending on the grade, it’s different depending on the state, but I think if you said the falls have been by $50 (per tonne) as an average, you’d be on the ball,” Mr Whitelaw said.

Grain Growers Limited president and Quambatook grain farmer Brett Hosking said the plummeting wheat price would have flow-on effects as well as impacting farmers directly.

“That money goes to football clubs, spent in towns, workers and the community,” he said.

Despite the difference in the pay packets of Australian growers compared to the rest of the world, grain handling giant GrainCorp is quick to remind farmers that this year’s prices are historically high.

“If you compare pricing to last year, pricing is very, very good,” general manager of operations Nigel Lotz said.

Last week GrainCorp received nearly two million tonnes of grain and Mr Lotz believed the price movements showed market forces at work.

“It’s going to a big January for us,” he said.

“The properties of grain are supply and demand [driven], so it is fluctuating and it always will fluctuate.”

It is not just wheat prices that are falling.

Australian canola and barley are also selling at a discount compared to global prices.

According to Thomas Elder Markets, the canola price per tonne in Western Australia has fallen by $125 since November.

Prices in Victoria and New South Wales have fallen by as much as $70 per tonne in the last week.

“Australia has the cheapest wheat, cheapest canola and cheapest barley in the world and it just got cheaper,” Mr Whitelaw said.

ABC NEWS

Tags: rains, wheat price, Australia, grain, grain harvest, wheat