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Australian wheat export surge ‘slows considerably’


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Is Australia’s golden period of wheat exports losing its lustre?

The southern hemisphere’s top exporter of the grain continued its run of increased grain shipments in July, as merchants continued to sell down stocks left over from last year’s record crop.

However, at 1.7m tonnes, exports were only 5% higher than a year before, a significant slowdown from increases averaging more than 30% earlier in the 2010-11 season, which began in October.

"The growth rate in Australia wheat exports slowed considerably in July," Paul Deane at Australia & New Zealand Bank said.

‘Realign prices’

The slowdown co-incided with the return of Russia, renowned for its competitive prices, to wheat exports, after an 11-month ban imposed to save supplies hit by the country’s worst drought on record.

Russia’s grain exports, mainly wheat, have been pegged by analysis group SovEcon at 2.6m tonnes in July and 2.9m tonnes last month.

"That’s affected everybody, not just Europe and its trade with the Middle East we all hear about," a UK grain trader told Agrimoney.com.

"For Australia too, they have had to realign their price expectations."

Rebound in progress?

However, Cargill-owned AWB, the Australian grain handler, said that recent rises Black Sea prices had lifted pressure on export values.

"Over recent weeks Eastern European wheat prices, considered to be the cheapest global wheat, have risen substantially in line with strong demand," AWB spokesman Jon White said.

"When combined with a predicted smaller corn supply out of the US this translates to higher expected prices for Australian wheat."

Signally, Australian wheat was offered at an Egyptian grain tender two weeks ago at $303 a tonne – cheaper than French and US grain, excluding shipping, and only some $8 a tonne above winning Russian offers.

AWB on Monday raised by Aus$10 a tonne, to Aus$300 a tonne, its forecast for returns to farmers selling benchmark Australian prime wheat through its pools.

Canola slowdown

The official export report also showed Australia’s canola shipments slowing last month, to 600 tonnes, although thanks to rapid trade earlier in the season, exports have already hit 1.38m tonnes, the best October-to-July performance for a decade.

"The Australian canola export programme has essentially finished for the marketing year," ANZ’s Paul Deane said.

"Exports are likely to remain marginal until new crop supplies become available."

However, in cotton, exports hit a record 600,000 bales last month, taking to 1.6m bales shipments since the crop year started in April, and leaving a further 2.5m bales to go, on ANZ estimates.

http://www.agrimoney.com/news/australian-wheat-export-surge-slows-considerably–3579.html

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