Gas Week

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World’s wheat price at A$480/tonne, up 25 percent on the dizzying highs of the last month, “unchartered territory” in period of “agflation” say analysts as Aussie output draws global attention

Posted by gasweek on 2 October, 2007

According to Brad Coopper in, Queensland Country Life, (27/09/2007, p.3), the world wheat price continued its sharp trajectory north last week, straining to break A$480 a tonne, up 25 percent on the dizzying highs of the last month that sent the domestic grain trade spinning.

May break A$500/t barrier: Analysts, who already believe the market had entered “unchartered territory” in a volatile but unsustainable period of “agflation”, would not discount the possibility the price would punch through A$500 a tonne as the drought continued to bite.

Failed winter crops push costs up: Forecasts by official Federal agricultural researcher Australian Bureau of Agricultural and Resource Economics (ABARE) as recently as July put Australia’s total winter grain harvest at about 37 million tonnes. The failure of late winter and early spring rain across the majority of the country’s wheat belt meant the figure had been slashed by a staggering 27 per cent and 35 per cent for wheat, Australia’s major winter cereal crop.

NSW hit hard: New South Wales was tipped as the hardest hit, with wheat production expected to halve from the 8 million tonnes forecast three months ago.

World attention on Aussie output: Australian Crop Forecasters managing director Ron Storey said the eyes of the world were also watching, with the international market – namely the Chicago Board of Trade (CBOT) – focusing on Australia’s crop outlook like never before. “The predicted weather even as little as 48 hours out, and the impact that might have on the existing crop, is driving Chicago’s current direction.” he said. “It’s a most unusual situation.”

Queensland Country Life, 27/9/2007, p. 3

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