DESPITE this week's encouraging Australian wheat harvest forecasts, the downside is that global wheat prices have been pushed down in recent months by a big world wheat crop combined with sluggish demand.
Commonwealth Bank agricultural commodities strategist Luke Mathews says: "In Australia, we've also had the added depressing influence of a high Aussie dollar."
"We expect Aussie wheat prices at harvest to be around $200 a tonne, which is where they are at the moment.
"If we're lucky, we might be in the low $200s, but certainly we're very unlikely to push up to values that producers have seen in recent years and would prefer to see."
The upgraded forecast comes after the US Department of Agriculture on Friday lifted its estimate of global wheat inventories by 3 million tonnes to 186.5 million tonnes, following good harvests in Russia and the European Union, The Australian Financial Review reports.
FarmOnline comment:
Australian wheat prices have fallen by 30pc since May this year. In May, the ASX Jan 10 wheat contract stood at around $300/tonne.
This week, it’s fallen to $209/tonne and to $224/tonne for Jan 11 contracts, according to CBA Agri Insights.
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