Outlook for Australia is bearish as wheat harvest nears and without sales to China

Published Aug 5, 2024

Tridge summary

The article provides an overview of the bearish price outlook for Australia's major grain export, wheat, as the country prepares for harvest with a lack of forward sales, particularly to China. The global market is saturated with wheat competition, and China's shift towards corn has reduced wheat imports. Australia had previously forward sold up to 30% of its wheat to China in the previous harvest. The domestic market will absorb about 10Mt of the expected 30Mt wheat production, leaving an export surplus that will face competition from other exporters like Russia. The article also discusses the potential for above-average seasons in New South Wales and Queensland, but questions the ability of high-protein wheat to fetch a significant premium in the export market due to competition from Canada. The price outlook for canola and pulses is more promising, though.
Disclaimer: The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

The price outlook for Australia’s major grain export is undeniably bearish as growers and traders head towards harvest without forward sales, which came last year from China, on the books. That was the message from the Australian Market Review – Outlook, Challenges and Opportunities session at the Australian Grains Industry Conference this week. It canvassed the views of LDC head of Asian wheat and barley research Tim Crowe, AC Grain principal broker Adam Clarke, and Ingham’s general manager commodities Matthew Clarke, and glanced around a global market awash with competition for all grades of wheat. Weighing on the Chinese complex is the fact that cheap and abundant corn has displaced wheat in many a ration. Mr Crowe outlined the enormity of the change in China, which imported around 4Mt of corn per annum until 2021, and then jumped to 25Mt, while wheat has gone the other way, with imports falling from around 15Mt per annum to 5-9Mt. “The quickest answer is that there is no ...
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