Australia to cash in on foggy wheat market next year
Sunday, 31 October 2010
CANBERRA, Oct 30 (Commodity Online): World's seventh largest wheat producer, Australia is all set to cash in on foggy global wheat market next year, according to Macquarie Bank Limited.
Speaking at the Southern Farming Systems' AgriFocus field, Alex Bos, commodity analyst of the Bank said Australia was in a really good position to sell milling wheat to the world.
He said crop failures in the northern hemisphere, tightening coarse grain supplies and impending problems with US shiploading logistics were just some of the factors which should see wheat prices remain relatively buoyant throughout next year.
Crop failure in the Black Sea region had also affected the world wheat market this year, taking about 25 per cent of total global exports out of the trade, he added.
He said Europe's two largest economies; Germany and France had a poor crop this year in terms of quality, so it can't be counted on to supply the world with high-quality milling wheat.
The US would struggle with wheat exports this year due to big corn and soyabean exporting programmes and even if they have the supply, getting it out of the country is an issue," he added.
While current world wheat stocks are relatively high, at about 174 million tones, Bos said this was artificially inflated because China and India had stockpiled about 78 million tones.
China and India have quite significant amounts in storage but that's never going to hit the market, he said.
Bos said a driving factor in world wheat markets was likely to be tighter coarse grain supplies, particularly in the corn market.
Speaking at the Southern Farming Systems' AgriFocus field, Alex Bos, commodity analyst of the Bank said Australia was in a really good position to sell milling wheat to the world.
He said crop failures in the northern hemisphere, tightening coarse grain supplies and impending problems with US shiploading logistics were just some of the factors which should see wheat prices remain relatively buoyant throughout next year.
Crop failure in the Black Sea region had also affected the world wheat market this year, taking about 25 per cent of total global exports out of the trade, he added.
He said Europe's two largest economies; Germany and France had a poor crop this year in terms of quality, so it can't be counted on to supply the world with high-quality milling wheat.
The US would struggle with wheat exports this year due to big corn and soyabean exporting programmes and even if they have the supply, getting it out of the country is an issue," he added.
While current world wheat stocks are relatively high, at about 174 million tones, Bos said this was artificially inflated because China and India had stockpiled about 78 million tones.
China and India have quite significant amounts in storage but that's never going to hit the market, he said.
Bos said a driving factor in world wheat markets was likely to be tighter coarse grain supplies, particularly in the corn market.