PLUNGING wheat prices and forecasts of dry weather are fuelling growers’ concerns that the multibillion-dollar winter crop, which benefitted from good planting rains earlier this year, might ultimately disappoint.
After rallying in May, wheat prices on the leading, international grains exchange, the Chicago Board of Trade, dropped more than 20pc in June, amid predictions of growing global inventories, The Australian Financial Review reports.
And prices have continued to slide in the past week, since the United States Department of Agriculture surprised the market by lifting its US national crop estimate on June 30.
The price plunge occurred at the same time as the Bureau of Meteorology warned of a developing El Nino event, which usually means low rainfall in the second half of the year across southern and inland Australia.
Managing director of grain market consultancy Market Check Brett Stevenson said some growers, particularly in Victoria, were spooked by the forecast of an El Nino, but the weather phenomenon – which last occurred in 2006 – did not necessarily mean the crop would fail.
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