With harvest all but done nationally, the market is now looking to confirm the size of the Aussie crop and to determine trade flows for the exportable surplus. Looking across Australia, receival data from some of the larger bulk handling facilities indicates to us that it’s allaying previous concerns of a sub 20mmt Australian wheat crop.
In Western Australia, South Australia and Victoria, improved final production numbers versus forecasts have been more notable where late rainfall and finishing conditions have offset the production shortfalls seen in New South Wales and Queensland. While official numbers will take a while to be confirmed, evidence is emerging that production is closer to the 22mmt mark than the previously thought 20mmt. W.A has come home with a late finish too, indicating production numbers pushing 8mmt. S.A has held close to its 4mmt, while it’s Victorian neighbour looks to push over 4mmt.
The major focus for the balance of the season then switches to demand and where Australian wheat is likely to find homes. With an export task of around 16mmt, demand will tend to switch back to more routine demand verse last season when the export task was some 7mmt higher. Where demand will likely slip, is into those destinations that increased their imports of ASW type wheat quite markedly last season – namely Philippines, Indonesia, India and China.
With Black Sea and Argentine wheat currently around $25-30 cheaper than Australian ASW and APW destination markets, this will lead to the slowdown in demand for Australian wheat.